General Motors, Burger King, CNN, Uber and AirBnB are all household names. But did you know all these companies were set up during economic downturns and global financial crisis? Many assume that businesses should not be set-up during a financial crisis, but as history has proved successful businesses can be born and thrive through tough times.
Despite the virus outbreak this year, research shows new businesses are being set up “a 21% rise” in comparison to 2019 with experts saying “If someone doesn’t have opportunities in a salaried job, that’s part of the motivation [behind setting up their own company],” and “With the shutdown people have had more time to think, and take time back from busy work schedules,”.
So if you’re planning to set up your own business: where do you start? What are the best businesses to set up during a financial downturn?
Things to remember:
- Businesses that do well in recessions usually provide services or products that increase in demand during financial instability
- Due to their nature, certain businesses remain almost unaffected by financial turmoil
- If you require start-up capital ensure you have a well thought-out business plan (cash flow forecasts included) and then research for support solutions.
Here are some of the best small businesses to start during a recession:
Accounting and Tax Services
During times of financial crisis, knowledge of accounting and tax services may come in handy. Companies and entrepreneurs need experts to offer up advice and help them deal with potential setbacks. Hence those with knowledge in this area can capitalize on this increased demand for this type of service.
During a recession unemployment numbers tend to go up. In addition to unemployment, underemployment is also widespread so most people are looking to redo their CV. Hence the demand for experienced CV writers is high. Moreover this is a service that can be provided from the comfort of your home and doesn’t require much more than a laptop.
Bulk Food Sales
As we have experienced this year, during a crisis, people tend to buy more. The coronavirus outbreak has caused panic buying across the world and to prevent disappointment, most people try to stockpile and buy essential items in larger quantities.
Setting up a bulk sales business could prove particularly lucrative. It is also a business that doesn’t require too much investment. Buy products at wholesale then make a profit on everything you sell.
During this downturn, or any financial crisis, being creative with your skills may pay off with added income, or potentially, a hot startup business.