I love recessions (depressions, take your pick) – it’s the best time to start a business. Warren Buffet has said on numerous occasions that he sells when everyone else is buying, and that he buys while everyone else is selling. If you expand that concept just a bit, you might arrive at the conclusion that it’s great to be aggressive when everyone else is conservative, like now. Here are all the great reasons now’s the time to start your business:
1. Few others are starting companies now. Most see entrepreneurship as too risky to launch during uncertain economic times. Furthermore, lots of startups are going out of business. All this boils down to less competition for you.
2. Labor is CHEAP! And I mean CHEAP! There is so much highly-skilled out-of-work talent wandering the streets in hope of salvation; its a great time to grab partners, employees, and contractors on a fraction of what you would have had to pay them a year ago.
3. Office space is CHEAP! In some places, we’re seeing office space at less than half of what it was a year ago. Landlords are panicing, and in many instances you can get office space for the cost of the expenses. Also check into companies that have laid off workers – you can often rent an office at a couple hundred bucks a month.
4. Infrastructure is CHEAP (and in many cases, free!). Know what it costs to manage an email server these days? Zero. How about shared server space? Zero. Conference calling? Zero. Hell, Quickbooks has a free online version. I pay $1/mo for the ability to receive faxes online.
5. Your job isn’t that secure anyway, and you probably don’t even like it. Nothing makes you feel more alive than being on the edge. It’s amazing how creative you can get when you’re relying 100% on your own abilities to stay afloat. Yes, it’s scary and stressful. But its fun. And to be honest, working in a job you don’t like and thinking you might be laid off is scary and stressful too. Might as well be empowered by the stress and fear by taking control.
6. Operate your business out of your home and your office space and some of your house expenses can become a tax write off. Okay, this isn’t specific to recessions, but it’s always a good reason.
7. Angel capital is scarce. Why do I think this is a good thing? Many entrepreneurs start businesses assuming they’ll raise capital, but few succeed in doing so. If you start your business assuming you won’t raise money because there isn’t any, you’ll start to focus on the best kind of fundraising – sales. It’s sustainable, scalable, and the cheapest kind of investment.
Make sure you do your homework first though. Research your market and validate your concept prior to launching. It’s one of the biggest mistakes most entrepreneurs make. So quit thinking about it, get out there, and execute.
