The Pruning Season: A Time of Opportunity for Entrepreneurs
A recession may seem like the worst time to start a business, but in reality, it’s the perfect time. During a recession or market crash, known as the pruning season, five things happen: bad companies go out of business, new companies grow, a decade of growth begins, overpriced talent disappears, and previously unavailable talent becomes accessible. These factors create excellent opportunities for new businesses, small businesses, and entrepreneurs.
Less Competition, Bigger Opportunities
During a recession, many businesses don’t make it, meaning there is less competition. If you have a better story and can get in front of customers effectively, there is a bigger opportunity for you to survive and thrive in this season.
All-In Mentality Attracts a Committed Team
A recession or market crash pushes people to be all in because they have to pay bills, survive, and fight. This climate attracts a team of individuals who are willing to roll up their sleeves and work hard.
Access to Good Talent at Reasonable Prices
When the market turns, good talent gets fired or laid off. This means talent is available at a lower cost than during a strong market, allowing startups and new businesses to hire skilled individuals at reasonable prices.
Cheaper Vendors and Office Space
During uncertain times, vendors and office space are often cheaper. This allows new businesses to negotiate better deals and save money on essential resources.
Identifying Real Businesses and Leaders
Recessions reveal who is a strong business leader and who isn’t. If you have a vision and are willing to work hard, this is the perfect season to start your business.
A Time for Disruptors to Emerge
Downturns in the economy create opportunities for disruptors to identify new ways of doing things and enter the market with innovative ideas.
Cheaper Equipment Due to Bankruptcies
Bankruptcies lead to discounted equipment, allowing new businesses to acquire high-quality resources at a lower cost.
During a recession, investors have fewer opportunities to invest in, making it easier for businesses that are thriving in this climate to attract their attention.
Competing Against Lazy Incumbents
Many successful businesses become lazy during good times. Entering the market during a downturn forces these incumbents to work harder and gives new businesses a chance to compete.
The Opportunity to Stretch a Dollar
Starting a business during a recession teaches everyone involved how to stretch the dollar in every possible way, a skill that competitors with a lot of cash in their bank accounts may not have.
Conclusion: Embrace the Challenge of Starting a Business in a Recession
Don’t be deterred by the challenges of starting a business during a recession. Instead, embrace the unique opportunities that this economic climate presents. With less competition, access to good talent, and the potential to disrupt the market, a recession could be the perfect time for your business to take off.