The Positives of Recession on Startups
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The Positives of Recession on Startups
Fremont: Just like a coin has two sides, every situation has a positive and negative side to it. While a pessimist will always see the glass half empty, an optimist will always see the glass half filled. Similarly, while a recession may spell doom to most big businesses, for startups it might just be the silver lining. Here's how recession may be a bane to startups: When the economy is going in for a toss, there are chances of more people getting sacked from big giants. This can be a very good time to rattle your brain, and think different. The under-employed and the unemployed people have all the time to be creative and startup their own ventures. Various studies have proved that firms launched during recession have a tendency to create more jobs and be durable. The jobs created when startups are established do not disappear overnight. A study by the Business Dynamic Statistics (BDS) which tracks the annual number of new businesses, giving data on firms and their establishments according to the firm age, states that when a given group of startups reaches age five, the group's employment level is 80 percent of what it had when it began. The startups created during recession can act as an antidote to the recession. Recession starts when prices increase, leads to lesser spending, decrease in manufacturing processes, firing of people--a vicious circle. At this point the startup enters, hires people, their spending is increased, which leads to increase in the manufacturing process, and boom, before you know, recession was a thing of the past. During times of recession, companies try to cut down on costs, by not only laying off employees, but also by giving them chance to work from homes, so that the total cost of operating a physical office sees a drastic steep. This is a time for many people to start up small office/home office--a category of business which involves from one to ten workers. Many consultants and professionals like lawyers, real estate agents start operating from home. They can cater to the nearby locales, and get sufficient hold of the people. Once they prove themselves to the people, they can actually dive off in the ocean (the market). They would be assured that if everything else fails, they still have people who confide in them. Recession is a time when many of the competitors will be under-investing, leading to weaker competition. This is a time, when a startup can come up with a fantastic idea, and challenge the competitors with their innovative products and services. During recession, people are worried about how to bring down costs, so why not lure your customers by giving them added benefits, launching new products, give them discounts? Even if that eats into your profits or even highlights a loss for you, you can be assured that your customers will be more loyal to you when the bubble bursts. It is always said that "A friend in need is a friend indeed", and this phrase can hold true not just for individuals, but companies also. The customers will realize that you tried to help them out in time of their misery, and would stick with you. So after the recession vanishes, not only will you have defeated your competitors, but more importantly have a strong backing from the customers. Another good reason to venture during a recession is the cheap availability of labor. With companies laying off their employees like a house discarding garbage, why not make use of it? People would be ready to join any company in order to sustain their homes. Since they are ready to work for lesser doesn't mean that you pay them peanuts. A decline in the paypack might not deter those who really want to work. And this is the time when you will get resources, who will be ready to work hard, and turn into your assets. Rightly said, "A positive attitude may not solve all the problems, but it will annoy you enough to make it worth the effort."

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