You would be crazy to start a business now! Haven’t you heard? China has devalued their currency, the oil prices have plunged, the world economy is in the tank! Who on earth would start a business now?
If that’s what you are thinking, as you tear up your plans to create your product and build the business of your dreams – NOT SO FAST! There are plenty of reasons why you should not only start your business NOW, but it is more likely to be successful! Here are our TOP FIVE!
You Will Learn the Hard Lessons First
If you start a business when the economy is weak, by sheer necessity you will have to learn excellent money management skills, your production will have to be extremely efficient, your quality control next to none, and your team highly motivated. Because every one thing that you get wrong – will be a very painful mistake.
You will definitely have the edge over any entrepreneur who has the luxury of deeper pockets, because when a problem arises, you will have to cure the cause, not pamper the symptom.
If a team member is not working out, you’ll have to fire them, if suppliers aren’t fulfilling contracts on time, you’ll have to change them – you won’t be able to bury your head in the sand and avoid conflict, or just throw money at a problem.
As Mike Michalowicz says in his book “Toilet Paper Entrepreneur”
“Money can be like a drug, temporarily covering your problems. Money allows you to do stupid things without consequences, hence keeping you stupid”
You Will Become Laser Focused, and Highly Productive
You had better get efficient at doing all the tasks that need to be done. This usually mean the elimination of “faffing”, or doing unproductive, non value adding tasks.
You will have to focus on those product lines or projects that have the highest profit margin.
You will have to be better than the competition – it will be cut-throat out there!
Sloppy quality will cost you money. You will either lose repeat customers who don’t complain, just don’t come back,or new customers…because the unsatisfied customers don’t refer them – or worse, bad mouth you, and also the customers who do complain will want refunds or new products. Either way, in a bad economy, your quality control processes need to be impeccable, as should your customer service.
Because if it’s not – someone else’s product will fill those shelves.
Necessity is the Mother of Invention.
It’s a cliche but it’s true.
Without a massive budget to throw at new inventions or projects, we start to think outside the box…..and find innovative solutions to problems. Steve Jobs recognized this, even when Apple had a billion dollar R&D budget, he still tried to emulate the atmosphere of the “lean start-up in a garage” to foster great innovation from his designers.
It also means that you have to lose those blinkers when it comes to pet projects. Unless they are destined to be profitable, they will have to be shelved.
There are Winners and Losers
In a less than buoyant economy there are always winners and losers. For example, the Canadian dollar is extremely low against the US dollar. This is great if you have a market for your product in the US, but really sucks if you are a Canadian company importing supplies from the US.
That means that you may have to rethink your business model.
At the moment, China has devalued their currency, trying to make their exports more attractive – can you source supplies from there? Can you find buyer’s markets where the currency is stronger than your home currency?
At home, can you negotiate better deals to get your costs down?
Rise and Grind!
There’s nothing like an upcoming mortgage payment, hydro bill, or even the desire to have enough cash to go on a holiday …to light the fire under your rear end. Having little or no cash can be stressful, and sometimes stress can paralyze you into inaction, so it is important to remember why you started a business in the first place….to have financial freedom right? So use your current financial situation to spur you into redoubling your efforts and working at your business.
If you can make it in a down economy, you can be booming in a great economy – but be careful!
All the lessons you learn now – efficiency, thriftiness, hard work, laser focus – should still be applied when the economy is on the upturn.
