No doubt times are tough. The consumer is pinched, Wall Street is hurting, bankruptcy and bailouts seem to be the norm. Pretty daunting times for anyone considering starting a business, or any small business owner for that matter. So the question is, are there any good businesses for bad times? And can economic downturns actually be good for small business entrepreneurs?
Are there good businesses?
Well, if you started a business in today's ecomomic turmoil you'd have something in common with Hewlett Packard, General Electric, and Sun Microsystems all of which were started during economic downturns.
Also, many industries are actually considered "recession proof" so if you're operating in any of the following capacities, or thinking of starting a business in one of these industries you're probably going to fair okay
- Medical Services / Health care
- Pharmaceuticals
- Necessities: food/grocery stores/chains
- Cosmetics
- Entertainment
- Home & vehicle repair & maintenance
- Debt collection
- Tax preparation / simplification
- Career/Job search/Life coaching
- Energy
- Security/Alarm services companies
- Vices
Some of those industries lend themselves better than others to small business and entrepreneurs, but there are a lot of possibilities none the less.
Could an economic downturn actually be good for small business?
An argument could be made for...YES! When the economy is down, there could actually be opportunity for the astute small business owner.
The truly successful business owner gets in the habit of seeing opportunity in the face of doom, gloom, and hopelessness!
- Reduction in cost
- Deals with suppliers
- Reduction in rent
- Labor cost reduction
- Provide Value = Get more Sales
- Companies are looking to save, if you can give them the value you'll get the business
- Greater Pool of Qualified Labor
- You cold be able to hire great people for a fraction of the cost during boom times
- More Bang for your Creative Buck
- If you can offer customers a creative way to save they will appreciate it more than when times are good, and reward you with more business.
This is by no means a comprehensive list, but opportunity is there to make good in a bad time. It takes creativity, networking, a flexible strategy, and ability to expand to fit a market niche, but that should come easy to all of you as business owners and entrepreneurs.
What do you think? Are there opportunities in downturns? Share your ideas in the comments section.
Photo Credit: procsilas
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{ 5 comments… read them below or add one }
Matt:
Valid points for turning lemon into lemonade.
Tough economic times can sometimes bring communities together. In some ways it would be nice to see the revitalizing of the “Mom and Pops” instead of the box stores.
One can hope…
George
Well, the condition today might be not a good time for business, but there’s always a chance to make profit in every condition, even the bad one.
@George
Mom and Pops have a chance to thrive in a down economy that’s for sure. They just need to concentrate on the customer experience and providing good value. Thing is when the economy turns back up, they’ll have won over all those customers they treated right when times were tough.
Matt
@Ecko
Absolutely, businesses just need to see opportunity when it is there.
Matt
Absolutely agree that a down economy is a good time to start a business. I’m doing it right now with my disaster preparedness consultancy.
I see some benefits, such as reinforcing the need to be nimble, financially sound, make good decisions.
I also recently blogged on how planning can help strengthen a firm in a down economy. Check it out here: http://planning4disaster.blogspot.com/2008/10/disaster-planning-helps-in-down-economy.html
Really enjoy your posts, Matt. Keep it up.