Now is the time to start a small business

Starting a new business is always a challenging task, especially during financial turbulence. We have gathered evidence to show you why now is the best time to launch a new project.

Top 5 Reasons to Start a Business During a Crisis

Analyzing the history of economic downturns (recessions) over the past 70 years, a certain pattern can be observed - all crises last on average 10 months (bear cycle), followed by a growth cycle lasting on average 50 months (bull cycle). During a recession, certain predictable things happen, for example:

1.   There is an opportunity to save on operational processes. When the economy is weak, the cost of renting premises, furniture, etc., usually decreases. Many companies try to remain competitive by offering more budget-friendly deals.

2. Tax reduction and better credit rates. The most advantageous deals are made when the financial sector and businesses are focused on survival. Moreover, in some countries, such as Ukraine, business conditions are being revised, authorities are introducing incentives and various support programs for entrepreneurs.

About how to increase the chances of attracting financing, we talked about in the article How to find an investor for MLM business.

3.  Competition decreases. Most people start a business when the economy is booming. Established organizations, on the other hand, usually focus on optimizing internal processes rather than marketing promotion during a crisis.

4.  Cheap and qualified workforce is abundant. The recession period is an excellent time to expand your team of partners and scale your business, as specialists are losing their jobs massively and looking for new opportunities for self-realization.

5.  Media attention is focused on new, innovative projects. Journalists love aberrations (deviations from the norm), and if you decide to demonstrate an "alternative" view of the market in crisis, they will pay attention to you.

During a downturn, there is less competition, more room for creativity, and more potential partners willing to start something new.

What Entrepreneurs Think About Launching Projects in Crisis

February 24-28, 2022, Franchise Insights, a division of Franchise Ventures, studied the mood of startups considering the shock from the invasion of Ukraine. The research results showed that the majority (73%) of potential entrepreneurs agree that now is a good time to launch projects. More than half (57.4%) of the participants said they are ready to start a new business within the next three months, and 76% of respondents believe that business conditions will be about the same or even improving in the near future. Also, 30.6% of participants think that the pandemic is no longer a factor affecting business conditions.

The pandemic and geopolitical uncertainty could not dissuade entrepreneurs that crisis is the best time to launch projects.

How to Create a Project from Scratch. Specifics of Crisis Management

Before we talk about the steps to take to launch a business, we want to remind you that not all projects achieve enviable success in turbulent economic times. However, a project created in a crisis, which has proven its value and demand, is much easier to scale later, in peaceful and stable times.

To create a company from scratch, you need to go through certain stages. First, you will need to:

- Analyze the market situation for new challenges. The market is restructuring - new problems arise, distributors change their attitude towards their companies, drop shippers change suppliers, etc.

- Choose the niche for the future project. Based on the analysis of the market situation and the changing needs of potential consumers, determine the niche for the future project and the product. By choosing a relevant and in-demand product, you will quickly gather business partners and customers around your brand.

Try to focus on items that will always be in demand, even during times of crisis and decreased consumer purchasing power. For example, personal hygiene products, food items, and other essential goods that need to be regularly replenished.

- Study direct and indirect competitors. Having an idea of what you want to do, find out who occupies the chosen niche and what are the strengths and weaknesses of these players.

- Define the marketing methods for promoting the company. Based on the analysis of competitors, think about how you will promote and develop your project.

Our team, with many years of experience working with partnership projects, recommends using various network marketing methods to promote new businesses. For more information on how traditional businesses use network marketing methods, read the article How Traditional Business Uses MLM Methods

- Develop a business plan. Collect all market analytics into a single document and forecast the outlook for your startup in the near future (at least for a year). The main goal of the business plan is to convince potential partners that this is an interesting business in terms of investment, one that will pay off the invested money and efforts.

- Create a demo version of the project and test its demand. The experimental version will reveal gaps, critical errors, and dangerous situations that could lead the business to collapse.

If you successfully complete all the above-mentioned stages, you will need to develop and scale the project, taking into account changing trends and customer needs.

An important stage in creating and developing the test version of the project is choosing a contractor company that will assist in the project's development and promotion. By entrusting experts who have helped develop hundreds of projects in various fields, you will save time and money. Experience in developing solutions for network companies and understanding the specifics of promotion in different niches allows for a rapid reengineering of business processes, increasing the company's conversion rate and competitiveness.