Top tips for starting a business in a recession
With the UK and global economies now officially in a recession, nobody knows what the next few months hold for business owners. Some industries such as retail, hospitality and leisure have been hit particularly hard, with redundancies and closures reported on an almost daily basis. Many businesses are fighting for survival, and yet, there are stories of successful start-ups that were launched during the pandemic and are thriving.
So why would you consider starting a business now, in difficult economic times?
As Albert Einstein said: “In the midst of every crisis, lies great opportunity”
Broadly speaking, if you’re considering setting up on your own, you probably fall into one of the two below categories:
- You have identified a new business idea as a result of COVID-19
- You have wanted to set up your own business for a while and the pandemic has forced your hand to make it a reality. This could be through redundancy or lack of employment options available, or a renewed sense of purpose and urgency found during lockdown
Whatever the reasons for wanting to set up on your own, this decision should not be taken lightly – and with limited financing options available, you will need to be confident that your business is a viable, long-term venture.
Before you take the plunge and go for it, consider our top tips for starting a business in a recession.
Define your niche
Tap into changing customer wants and needs and identify which problem(s) you are providing a solution for. Consumers are tightening their purse strings and need to see genuine value in order to part with their cash.
Get the business essentials right
The basics of starting a business are the same, regardless of the state of the economy. Conduct market research, write a business plan, decide on the right legal structure, be clear on your accounting and tax obligations, get insurance, and most importantly, look into different finance options to help get your business off the ground.
Agility and adaptability are two of the key success factors for new businesses. Things change quickly, and how businesses respond to and adapt to changing circumstances will play a huge part in their success.
Maximise your business network
Use your existing contacts to gather initial feedback or look for opportunities for potential collaborations. If you’re looking for a business partner or to recruit a team, make the most of the available talent pool.
Leverage free tools
Once you’re ready to start marketing your business, make the most of free tools that are available, such as social media, email marketing platforms and media outlets. In tough times, people are desperate for good news so media outlets may be more prone to featuring your story than in normal circumstances.
Here at Hartley Fowler, we have advised start-ups on their accounting and tax affairs for the last 50 years. If you’re thinking of setting up your own business, we would be delighted to have an informal chat with you.