Do you think the best time to start a business is when the economy is booming? May be. However, some of the greatest business success stories in the past few decades came from a good idea developed during a recession.
Consider these names: CNN, Uber, Airbnb, and Square. There are many more.
The impact of COVID-19 is forcing existing businesses to reinvent themselves and some of the major business barriers of today will trigger new startups to offer innovative solutions.
According to a November 2020 Accenture analysis, the pandemic is expected to change consumer behavior quickly, with more than $ 3 trillion lost or to the companies best prepared to take advantage of the opportunity.
Here you will find ways to formulate and identify business opportunities in difficult times.
1. FAST ADAPT TO A CHANGE MARKET
During the Great Recession of 2008, Jonathan Slain owned personal training and fitness studios. This is a personal expense that many people will eliminate when money is tight.
“So I spent a few months in the recession under my desk trying to figure out what to do,” says Slain. He needed money for operations and payrolls and ended up borrowing money from his mother-in-law to keep his business going.
Every two weeks he had to come back to her to cover the payroll; There were “10 excruciating phone calls,” he says, and he ended up borrowing $ 250,000 in total. Finally he was able to repay it.
As a management consultant in Ohio, Slain co-wrote the book, Rock the Recession: How Successful Leaders Prepare for Downturns, Thrive, and Create Wealth. He says the lessons he has learned from failure, along with the insights of his friend and co-author Paul Belair, will guide a profitable recession strategy.
As he says in the book, “Learn from my mistakes. Don’t be like me Be like Paul. “
Belair owned a heating and air conditioning company during the same recession.
Knowing that customers would buy fewer new units but would choose service instead, Belair and its management team focused the company’s focus from 80% sales to 80% service.
The nimble fulcrum enabled Belair and its investors to sell the business about five years later for more than 80 times their original investment, Slain says.
The lesson: adapt quickly to a changing market rather than relying on a relative.
2. TRY TO FIX SOMETHING YOU BOTH
Whether the result of inspiration or despair, many successful businesses are started by someone trying to fix something that is bothering them, says serial entrepreneur Trevor Blake.
“They found something that kept bothering them, found there was no solution, and went to fix it themselves. By default, they became entrepreneurs, ”says Blake.
“When something gets under my skin that I want to fix it, I suddenly have a successful idea. Of course, at this point, I have no idea how to fix it, but that’s half the fun. We can all find solutions at some point, ”adds Blake.
Blake offers two high profile examples: Sara Blakely cut her tights to create a sleek look under her white pants. She later launched Spanx as a new item of clothing. Richard Branson urgently needed to see his girlfriend who was waiting in the British Virgin Islands on time. He chartered his first aircraft as a solution and from there Virgin Atlantic Airways was born. That’s a successful problem solving, says Blake.
3. Look for a 5 degree difference
Instead of looking for the next big idea, Slain says that a small tweak to an existing business idea can be all that it takes.
“I don’t think it’s sitting in your room really thoughtfully trying to invent the next Facebook. But it’s about taking what you know really well and thinking about where the future will be and how you can start bridging the gap to get there. “
Perhaps you’ve worked for someone else and you see a small change that could be made to the existing business model. Not a 90 or 180 degree shift, but maybe a five to ten degree improvement.
Slain notes that the Airbnb founders didn’t begin to believe they were going to revolutionize the hospitality industry. You just started putting an air mattress in a guest room to make a little extra cash.
4. EMPLOYEES CAN BE OPTIONAL
And starting a business doesn’t necessarily mean hiring a lot of people right on the doorstep. Blake has never hired an employee and is in Company # 6 after cashing out around $ 300 million in previous ventures.
“When most people buy a home, they don’t hire a full-time handyman to live in a guest room just in case something goes wrong. They hire contractors when and when they need them, ”says Blake.
Starting without employees can be a smart move – and cost less money. He recommends hiring problem solvers if you only need them on a contract basis. Make sure you understand the tax implications of contractors and employees.