Think the best time to start a business is in a booming economy? Perhaps. But some of the biggest business success stories of the last few decades actually came from a good idea that was born during a recession.
Consider these names: TBEN, Uber, Airbnb, and Square. There are many more.
The effects of the COVID-19 pandemic are forcing existing businesses to reinvent themselves, and some of today’s most significant business barriers will spark new startups with innovative solutions.
With the pandemic rapidly changing consumer behavior, more than $ 3 trillion is expected to be lost or transferred to companies best prepared to exploit the possibilities, according to an Accenture analysis from November 2020.
Here are ways to phrase and recognize business opportunities during tough times.
1. Adapt quickly to a changing market
During the Great Recession of 2008, Jonathan Slain owned personal training and fitness studios. It’s a personal expense that many people will eliminate when money is tight.
“So I spent several months of the recession huddled under my desk, trying to figure out what to do,” Slain says. He needed money for operations and payroll and eventually borrowed money from his mother-in-law to keep his business afloat.
Every two weeks he had to come back to him to cover the pay; there were “10 excruciating phone calls,” he says, and he eventually borrowed a total of $ 250,000. Finally, he was able to repay her.
Now a business consultant in Ohio, Slain co-authored the book “Rock the Recession: How Successful Leaders Prepare for, Thrive Pendant, and Create Wealth After Downturns”. He says the lessons he learned from the failure, combined with the insights gained from his friend and co-author, Paul Belair, 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 business during the same recession.
Knowing that customers would buy fewer new units but instead opt for service, Belair and his management team shifted the company from 80% sales to 80% service.
The nimble pivot allowed Belair and his investors to sell the business about five years later for more than 80 times their initial investment, Slain says.
The lesson: adapt quickly to a changing market, rather than relying on a parent.
2. Try to fix something that is bothering you.
Whether it’s the result of inspiration or desperation, 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, realized there was no solution and set about fixing it themselves. By default, they have become entrepreneurs, ”explains Blake.
“When something penetrates me enough that I want to fix it, suddenly I have a winning idea. Of course, at that point, I don’t know how I’m going to fix it, but it’s half the fun. We can all eventually find solutions, ”adds Blake.
Blake offers two high-profile examples: Sara Blakely cut her tights to create a slick look under her white pants. She then launched Spanx as a new wardrobe item. Richard Branson desperately needed to arrive on time for his girlfriend, who was waiting in the British Virgin Islands. He chartered his first plane as a solution and from there Virgin Atlantic Airways was born. It’s successful problem solving, says Blake.
3. Look for a difference of 5 degrees
Rather than looking for the next big idea, Slain says a small adjustment to an existing business idea may be all it takes.
“I don’t think he’s sitting in your room thinking really hard, trying to invent the next Facebook. But [it’s] take what you really know well and start thinking about the future and how you can start closing the gap to get there. “
Maybe you’ve worked for someone else and seen a small change that could be made to the existing business model. Not a 90 or 180 degree shift, but maybe a 5 to 10 degree improvement.
Slain notes that the founders of Airbnb didn’t begin to think they were going to revolutionize the hospitality industry. They just started putting an air mattress in a guest room to earn some more money.
4. Employees can be optional
And starting a business doesn’t necessarily mean hiring a lot of people from the start. Blake has never hired an employee and is part of Company No.6, having cashed in on previous projects to the tune of some $ 300 million.
“When most people buy a home, they don’t hire a full-time handyman to live in a spare bedroom just in case something isn’t right. They hire contractors if and when they need them, ”says Blake.
Starting without employees can be a smart move, he says – and will take less money. He recommends hiring problem solvers when you need them on a contractual basis only. Make sure you understand the tax implications for contractors and employees.
This article was written by TBEN and was originally published by The The Bharat Express News.