Editor’s note: This article was first published in July 2010 during Spain’s post-2008 crisis. The falling property prices, construction wages (1,500 euros a month for beginners five years earlier versus 1,300 for a site manager “today”) and keg prices compared with 15 years earlier reflect that time.
We all know that the market is full of risks these days, but there’s no bigger risk to your finances than being fired from a company because its founder ran it badly.
If you’re tired of dreading the dismissal letter, of your bosses’ pressure and poor management, or you’ve simply wanted to start your own business for a long time, it’s not all disadvantages. Let’s talk about the advantages.
Why start a business during a recession?
We tend to quiet a dream without realizing it by putting the disadvantages and drawbacks first, when in fact, as we’ve discussed before, what’s a disadvantage for many can be an advantage for others.
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Cheaper premises: When you look for an office, warehouse or shop, property is much cheaper than it was a few years ago. That’s the downside for the real estate investor, but the upside for the new entrepreneur.
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Great deals: Not just the ones some suppliers may offer you, but also, for example, on furniture or tech equipment from companies that have closed and don’t know what to do with their furniture, which will probably end up in the trash unless someone buys it. And it’s not only office furniture: the same goes for delivery trucks, vehicles and all kinds of tools. You can certainly decorate, furnish and equip your office for far less than you ever imagined.
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Cheaper workers: I don’t want anyone to take me for someone who exploits workers, but it’s true that people today are willing to work for less money. I remember that in Spain, five years ago, beginners in construction wouldn’t work for less than €1,500 a month. Today, €1,300 gets you the site manager. The same goes for administrative staff, secretaries, cleaners and so on. Some politicians have also helped bring this about by making a point of saying that the way out of the crisis is to work more and earn less. I don’t agree with that approach, but if it comes to that, you’d better be the one running the company than be on the workers’ side.
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Less competition: Although most people think there’s more competition than ever in every sector, that’s not really so, because most companies are fighting not to close and are cutting staff. Imagine what will happen to those companies as soon as a new company appears that wants to expand in the market, with a clear, well-defined strategy whose goal isn’t survival but taking over the market.
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Lower prices: Just ask the bars. The coffee distributor installs the coffee machine for you, and the beer distributor gives you a free keg for every four you go through, with kegs costing less than 15 years ago. Buy 10 cases of Coca-Cola and they’ll throw in a case of wine. Clearly, competition between brands means the business owner buying these products comes out well ahead.
As we can see, a crisis isn’t all disadvantages. Of course, we need to be very clear about how we could make the recession work in our favor and, above all, whether our business idea would be viable during it.
For those who believe they have what it takes to start a business, we’ve given five reasons and advantages for starting your business in a crisis.
Further reading
- How to start a business with no money
- How to manage a small business in a crisis
- Why new businesses fail
- How to be a successful businessperson
Featured image: Ser Amantio di Nicolao, CC BY-SA 4.0, via Wikimedia Commons.
