The guiding principle of successful start-ups is the ability to find product-market fit, or in other terms ‘solve a customer’s problem’. During economic downturns there are plenty of problems, so budding entrepreneurs should seek ways to solve them.
Here are a few reasons why now might be the time to start a new career:
1. Downturns create problems that need to be solved
Recessions create a variety of new problems that can be solved with creative thinking. A downturn can provide entrepreneurs with real world example of customer pain points. Most businesses are currently struggling to either carry out their work, source materials or service their customers effectively. In the wake of the current crises, there will be new industries built around these pain points.
2. Save on costs
Products and services are cheaper during recession. As struggling businesses sell assets, vendors reduce prices to move inventory and banking institutions lower interest rates, new businesses can take advantage of their purchasing power as others cut spending. With current government stimulus packages offering a range of financial support, entrepreneurs can leverage their favourable position to gain market share.
3. All recessions end
As markets rebound, investors will look for opportunities that weathered the recession effectively. Proven performance within a downturn is a marker for future success. Companies that manage to achieve product-market fit during a recession are set up to take advantage of growth opportunities as the wider economy rebounds.
As we batten down the proverbial hatches, this is a great opportunity for entrepreneurs to look toward the horizon. While global recessions are frightening, and the current crisis is challenging for many, new businesses should harness the economic uncertainty to secure their market position.
The South Australian Business Chamber Encore Program is a workshop and mentoring program for South Australians aged 35 or above looking to either establish a new business or grow an existing one. Participants will learn how to develop a comprehensive business plan and a sustainable business model. In addition, a dedicated mentor will nurture and guide participants throughout the program with monthly one-on-one mentoring sessions. To join the next Encore Program, register your interest here.
