Why Start a Business During a Recession

ben francia | by Ben Francia |Last Updated: April 30, 2020

The biggest companies today were businesses that started in a recession

General Electric, IBM, Disney, and Microsoft have become massive companies that continue to provide value to their long time customers. Besides being world-shapers and masters of innovation in their own right, they have one thing in common with each other: they all started in a recession.

The economic landscape has been hit by many recessions in the past. Whether it’s brought about by uncontrollable factors like calamities or diseases, or completely man-made like war or bad consumer decisions, recessions cause problems. These problems, of course, need to be solved.

This is where your diskarte as an entrepreneur or a small business owner comes in. How does your business solve these problems? Can you provide your services or products in spite of the situation? Will you be able to readily adapt and rise above most of your competition?

At the end of the day, It’s all a matter of identifying what those problems are and how to resolve them. It can seem difficult at first, but given enough time and if you play your cards right, you can potentially become one of the most influential and biggest companies in the world. 


Considering how this recent pandemic has changed so many people’s lives in the span of a few months, it’s going to mean a lot more in terms of their needs and wants. Over the past couple of years, thanks due in part to the Internet and social media, consumer behaviour has changed.

Recessions, too, will adversely affect the way a consumer decides on their next purchase. Aside from cost however, consumers will also make choices based on what’s more innovative and convenient. Considering the COVID pandemic, they might work with businesses that have contactless payment options and trusted logistics partners.

There are cases where consumers prefer the more convenient option over the cheaper ones. For instance, going to the wet and dry market to buy fish can definitely be cheaper, but inconvenient because you have to step out and expose yourself to the elements. If you have a mobile app that allows you to order fresh fish, it might be marginally more expensive, but it’s very convenient. This is also much safer because you don’t need to go out due to COVID. 

This is why startup companies that cater to more innovative solutions that make it more convenient for their customers, can go head to head against larger, more established companies. Companies like Lazada, Shoppe and other ecommerce sites get way more attention than more established retail companies because they’re more adaptable.

The takeaway? Innovate and evolve based on the problems brought about by this recession. The world’s changing, it might be a good idea to do so as well.


Because of the rise and fall of some prices during recessions, business operational costs tend to shift. As a notable example, gasoline prices have gone down, making other resources relatively cheaper as a result. Depending on your business’ industry, you might find that some costs can be cheaper or more expensive than before.

For instance, rental costs for business use have gone down because of the recent COVID pandemic. Advertising costs have also gone down because of some organizations’ hesitance to invest in advertising in these trying times. Labor relatively costs lower too (or at least is more easily negotiable) mostly because, just like how companies are not willing to advertise, they’re not willing to hire new people as well.

It’s true that this may not always be the case. But with a little resourcefulness, you can potentially make operational costs lower for you in the long run. Do a little research on opportunities to make business operational costs lower.


It might seem counterproductive, but now is the perfect time to build your team that will help you build your business. Considering the amount of people being laid off or leaving their respective companies for greener pastures, there’s definitely someone out there who can help you out in any facet of your venture.

Since a lot of people are looking for opportunities in the job market, there should be no short supply of skilled or talented people who can help you build your business. What makes this even more of a good opportunity is the fact that, depending on this potential new hire’s background of course, you’re potentially helping someone in great need other than your customers.

In line of course with operational costs, it’s important to define what human resource you actually need, including their job responsibilities. Costs are still an important consideration to make, along with making your people happy, so strike a balance. 


Regardless of the situation, it’s always challenging to start a new business. In the midst of a looming recession and the wake of COVID-19, it’s difficult enough to keep your business afloat. What more putting up a new small business?

As an entrepreneur however, you have to keep in mind that along with change comes opportunity. In an age of digital transformation and an incoming recession, there’s bound to be a lot of change, hence, more opportunity. This is evident even before the pandemic since customers’ needs have started changing ever since the Internet has been introduced.

One of these opportunities is to learn from hardship. You can learn things from the current situation that you won’t otherwise learn in a positive and booming economy. It goes without saying that if you become successful in a situation like this, it would be much easier in an economy that picks up.


At the end of the day, the norms have changed along with consumers and their behavior. It is the perfect opportunity to reconsider old belief systems about how businesses are run and start coming up with new, more innovative ways of providing value to your customers.

Regardless whether you’re starting a new business, if you’ve lost your job and want to start a new venture, or have recently closed down an old one and are reconsidering to open another, now is the perfect time to strike. All you need to do is identify a problem that needs fixing by your business.

Once you’ve done that, do some internal thinking about how to proceed with your business. Start from your strengths and passion and see how you can align it towards taking advantage of opportunities and helping your customers.

If you’re starting a new business, or if you’ve lost your job and you want to start a new business, or if you’ve lost your company, now is the perfect time to start over. All you need to do is identify a problem that needs to be solved, start from your strengths and passion and solve the mentioned problem.

As mentioned earlier, General Electric, Disney, IBM and Microsoft survived the worst economic conditions because they’re adaptable and took advantage of opportunities present at the time. As contradicting as it sounds, this might potentially be the biggest break in a lifetime. So think about it, find that one problem that needs solving and see how your passion and strengths can help solve it through business.

If you’re looking for more content like this or anything about digital marketing, feel free to subscribe to our newsletter to get notified via email. What do you think? Is it a good idea to put up a business in the midst of a recession? Share your thoughts and opinions in the comments section below.

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