Starting a business is an exciting venture, but it can also be daunting, especially when the economic landscape seems uncertain. You have a brilliant idea burning inside you, but you might be wondering if now is the right time to take the plunge. After all, the path to entrepreneurship can sometimes feel like stepping off a cliff while blindfolded.
You may be questioning whether your business could survive if you launched it today. Perhaps you’re tempted to put your dream on hold until conditions seem more favorable. However, as you’re about to discover, pinpointing the “perfect time” to start a business isn’t as straightforward as it might seem. In fact, some businesses can thrive even during challenging economic periods.
In this article, we’ll explore the factors you should consider when deciding to start your business. We’ll look at recession-proof industries, discuss the importance of timing, and provide insights on how to build a resilient business model. By the end, you’ll be equipped with the knowledge to make an informed decision about when to transform your entrepreneurial dream into reality. So, let’s dive in and explore the key considerations for launching your business in today’s economic climate.
Are you ready to run your own business?
What’s your business plan? Where’s the money coming from? If you’re serious about striking out on your own, it’s time to dig into the details and see if you have what it takes to get a new business off the ground.
We rounded up all the nitty-gritty details here, and it’s a good place to start.
If the steps in that list don’t overwhelm you, you’re probably ready to do the work it takes to start your own business.
Can you afford to work for free?
Every new business is different, but one thing is pretty common across the board: unless you’re the darling of Silicon Valley and have investors throwing money at you, chances are good that you won’t cut yourself a check for the first few years.
It’s a better time to start your business if your savings are in good shape, or you’re prepared to downsize and simplify your life to make this new venture happen.
Is there demand for what you’re selling?
Does your idea have wide, popular appeal, or at least the potential for a smaller, enthusiastic following? The thing about businesses is that they have to make money to stay open. At the end of the day, your concept is only viable if people understand it and are excited enough about it to give you their money.
Does that sound like your idea? Be honest with yourself. If you think your current idea falls short, that doesn’t mean it’s a no-go. It just means it’s time to do a little more research and find the niche where your business idea can make a difference with a few adjustments.
How will you set your business apart from the competition?
Too often, people launch a business without considering the competition: not just how many competitors there are in the market, but also how they can differentiate themselves from these competitors.
Customers today are overwhelmingly shopping for an experience more than a price tag. In what creative ways can your business offer them an experience like no other in your market?
Is there a right time of year to start a business?
Besides considering market health and your own stamina, another important decision to make is the season in which you want to launch your business.
We won’t tell you there’s a magic month that is most successful; that’s sadly not the case. Instead, think about the nature of your business, and human nature altogether, when it comes time to decide when to open. When are people most going to need what you’re selling? For example, if you’re a clam shack in the U.S., you better be selling tartar sauce by Memorial Day if you want to stay in the game. On the flip side, opening a ski shop in July might not be your best bet.
If your schtick isn’t seasonal, think about the vibe of your business and when people will most be excited for what you have to offer. A lot of new businesses start in the spring, after taking the first few months of the year to get things up and running. It’s not a bad idea to launch at a time when there’s fresh new energy in the air and people are looking for something to invigorate their lives after winter… but will your business be negatively affected by everyone going on summer vacation?
We wish we had a simple, straightforward answer for you here, but as you can see, it really depends on your idea and the customers you plan to serve. Be sure to give this some serious thought as you set up your business plan, so you start off on the right foot.
6 recession-proof businesses
There are some industries that remain steady no matter what the markets are doing. If your business idea falls into one of these categories, it might just have the wherewithal to weather a run-of-the-mill economic downturn:
1. Grocery stores
It’s simple; people always need to eat. Preparing your food at home is often much more affordable than eating out, which is why restaurants are one of the first sacrifices people tend to make when a recession hits. Grocery stores, in turn, pick up that slack and often see an increase in revenue during recessions.
2. Dollar and discount shops
Bargains become the holy grail in a recession. In fact, when an economic downturn looms, investors know to start eyeing and buying up the stocks of dollar stores, because they always pay off, literally.
Thrift and consignment shops also do well in a recession. People like to sell off their old, unworn clothes for a few extra bucks and feel the rush of digging through the racks without spending a fortune.
3. Daycares
As long as parents have to work, there needs to be a place for kids to go. Whether it’s actual childcare centers or daycares run out of someone’s home, this is a service that is usually recession-proof.
4. Mechanics
If eating out seems like a luxury to people in a recession, a brand-new car is a total extravagance. And because consumers are less likely to buy cars in a recession, and more likely to travel by car than other modes of transportation, mechanics often see an uptick in business as people bring in their older models for maintenance.
5. Home repair services
Toilets, furnaces, and roofs don’t know what a recession is, so you can count on them to act like it’s business as usual in an economic downturn. That’s why the businesses that help maintain these essentials—plumbers, roofers, and the like—see steady revenue no matter what the markets do.
6. Accountants
People still need to pay their taxes when the economy takes a turn. Plus, business owners and other folks with assets to protect often search for ways to cut costs and protect themselves when money gets tight. If you can help people look after their cash flow, that’s a pretty recession-proof skill to have.
5 industries that can thrive during economic uncertainty
Even during uncertain times, some industries can experience growth and success. Here are a few examples:
1. Food delivery services
When people are spending more time at home, the demand for food delivery often increases. This can be good news for local restaurants who are able to pivot to offering take-out and delivery services. The trend of ghost kitchens has also gained traction. As restaurants shift from sit-down to 100% delivery, there’s no longer a need for a real storefront with seating—an industrial kitchen with a fleet of delivery drivers will do.
2. Local farms
Small family farms can see increased interest during times of economic uncertainty. When grocery stores experience shortages, the short supply chain of local farms can become invaluable. One-off purchases and CSA farm-share subscriptions often see an uptick in these situations.
3. Drive-in movie theaters
Sometimes, older business models can make a comeback. Drive-in movie theaters, for instance, can see renewed interest when traditional cinemas face challenges. They offer a unique, nostalgic experience that people might crave during difficult times.
4. Hobby shops
During periods of economic stress or increased time at home, many people turn to hobbies as a form of escape and creativity. Whether it’s knitting, painting, or doing puzzles, stores stocking these pastimes can see a real uptick in revenue.
5. Remote work services
As more companies embrace remote work, there’s an increased need for services and technologies that support remote workers. Whether it’s a virtual phone system a business uses or consultants who can advise on best practices for distributed teams, the future appears to be wide open for businesses who offer services in the remote-working sphere.
Knowing when to start a business
There will never be a perfect time to start a business, but if you have a good idea in an in-demand market, it might be the right moment to take the leap.
The businesses that do best in uncertain times have one thing in common: they have a strong yet agile foundation that makes them ready for anything and able to pivot quickly. Keep this in mind as you start mapping out your own business plan.
While you can’t anticipate every event, you can study the overall lessons that businesses learn during challenging times—about agility and customer retention through a crisis—and bake them into your big idea.
Learn more about how RingCentral can help your business by unifying calls, texts, video meetings, fax, and AI intelligence with a reliable communications solution that helps grow your business.
Originally published Oct 08, 2024, updated Oct 19, 2024
