October 6th, 2019
•There will be a recession. We just don’t know when, or how bad it will be.
•Chances of survival for your new small business go up when you stay focused and make use of available tools for managing costs and attracting new customers.
•Networking can improve solutions and contribute to business development.
Is this a good time to start a business? And by “this,” we mean the last quarter of 2019, nearly 11 years into one of the most remarkable economic expansions in US history.
In fact, this is a good time to start a business. But before we get into why, let’s quantify the expansion we’re in, using stock performance as a gauge.
Since mid-March 2009, when equities started to claw out of the crater blown out by the collapse of Lehman Brothers in September 2008, the S&P 500 has grown by about 290%. So, with a run-up like that, when the fall comes — and some economic indicators point to a US slowdown in the making — it’s apt to be a doozy, right?
Well, maybe. But the 2008 debacle was unusual, with irresponsible home loans and overly inventive financial products at its core, and — a wrinkle most forget — with many Americans already stressed by astronomically high fuel prices through the previous 18 months. It’s also worth remembering some recessions don’t last as long or bite as hard as others. The short recession of 1991 is a good example. We’ve also bounced off recessions that looked inevitable, as in 1995 and, arguably, in 2011.
In short, we don’t know when the next recession will hit, or how bad it will be. So, just as most financial advisors warn their clients against trying to “time” the market for investment purposes, you shouldn’t delay starting a business for fear of a recession whose severity and start date you can’t hope to determine.
Let’s put it another way. If you wait under the economic stars are perfectly aligned, you’ll never start your business.
To determine your readiness for launch, you might be better off looking inward. Succeeding as an entrepreneur takes determination, a certain amount of passion and enough innate optimism to keep you going when your goals appear as wavering flecks on the horizon. A business owner has to be a genuine self-starter, a constant innovator, and her or his own most relentless taskmaster.
If you can check those boxes and have a good idea for a business, go ahead and start it now.
As you get set for launch, it can help to acknowledge that a recession will come sooner or later. And when it comes, it will test your resolve, your ingenuity, and your ability to tough it out in an environment where you may find yourself working harder but making less money, at least for a time. If that seems daunting, you may take comfort knowing two of the most successful companies in the world, Microsoft and Apple, begun less than a year apart, endured a severe recession in their formative years.
Meanwhile, newer companies inspired by these tech pioneers have packaged innovations for small businesses around concepts and functions such as the “internet of things,” artificial intelligence, reporting and collaboration, self-service automation, and consumer-data security. Altogether, these verticals can make a new business more resilient in hard times by expanding service menus and reducing operating costs.
You can further strengthen your fledgling business by using social media to get your solutions to the problems faced by potential customers into the marketplace of ideas. Fortunately, you can draw content — either whole cloth or in modified form — from online libraries to enhance your knowledge offerings. You can also take advantage of other low-cost solutions for media outsourcing, marketing, project management, membership communities, and financial solutions such as small-business loans.
Equally, you can work to deepen your understanding of your clients’ needs and strengthen your referral pipeline by networking with professionals working in adjacent fields. While there is much to be learned from direct competitors, reaching out to professionals in complementary businesses can result in connections of mutual benefit to clients of both enterprises.