It’s long been said that opportunity lies in the rubble of disaster, and although a recession may seem like the worst possible timing to begin thinking about opening a business, it could be the perfect opportunity for you and your planned business.


TSF - Newsletter & social  images (15)Starting a business in a recession

Starting a business is not easy, whether we are in boom or bust years, but starting a business in a recession is even harder. Lenders are more concerned about giving credit, and your potential audience for customers or clients is likely to have less free cash to spend on your latest idea than they would have before a recession.

With that out of the way, there are several reasons why starting a business during a recession is a good idea:


Problems can be solved

All businesses are created for one sole purpose: to solve a problem for customers, whether through products or services, to turn a profit. No matter where you are on the supply chain, your business needs to know what problem it’s solving and how it can help. In a recession, this is intensified. More customers are likely to need solutions to their problems, and you could be holding the solution. Show them you can help them in these turbulent times, and it could financially reward you.


Competition is reduced

With a recession, often financial trouble swiftly follows. Therefore, it is likely that competition is weaker than it has ever been. Many competitors will be unlikely to take risks, and so many may also see their stuck-in-the-mud business taking a nosedive. Times like these see hundreds and thousands of companies doing the same thing. Being cautious of trying something new and unique that can help solve a problem for a customer can be their undoing, however.


So why start a business now? As a new business, you might not have found your unique angle yet. The recession can provide you with one. Your flexible and fresh start-up business has an opportunity to take your niche by storm and do something that your competitors aren’t willing to do, thus improving your unique selling point. As your unique selling point often holds the key to your success, this cannot be underestimated.

And there are some pretty big names who've already done it - AirBnb, Disney, Fedex, Groupon, IBM, Microsoft...all major businesses that rose out of tough economic times.

This is how to succeed in a recession, rather than letting it cripple your business.




How to raise finance for your new business in a recession

Companies started during a recession will undoubtedly come up against financial issues. In a recession, lenders are much less willing to lend out to brand new businesses, especially those with less of a solid business plan than perhaps they would have done during the boom years. That doesn’t mean there aren’t solutions.

Two types of funding TSF Finance is seeing increasing requests for now include asset finance and invoice finance.

Asset finance is used by businesses that need to buy assets, such as machinery and equipment, that are usually expensive. New companies can purchase the assets required through options such as leasing, which will allow them to use and operate the equipment needed while paying back the balance slowly over time from the profits generated.

Invoice finance is a little more complicated but essentially allows businesses to borrow money against agreed invoices, paying back the debts when the invoices are paid. This is an excellent way of giving your new business a fast cash infection to get the ball rolling when you know the money is coming in to cover the repayments.

Starting a business during a recession may be a tough decision, but there are definite bonuses. Success stories of many of the world’s leading companies, which were started during some of the hardest times, can offer some comfort. In some cases, it’s the grit and determination that the business owners showed right at the beginning that has helped these companies started during a recession thrive.

If you're looking to raise finance for your start up, we can support your ambitions for growth by equipping you with the right financial solutions. Let's have a chat today:


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