The Positive Side of Recession?

by Clara Albert, CAE, Executive Director

Can your business actually benefit from a recession?
  
I was on a webinar recently that discussed the positive side of a recession from an entrepreneur's stand point.  Did you know that 30-40% of fortune 500 companies started in economic downturn? The list of companies that started in a recession include Target, Instagram, Burger King, Delta, Airbnb, 3M, Trader Joes, Disney, and Uhaul to name a few. 

So, are we entering a recession now? 

We have typically seen one every 10-12 years since WWII. This is the longest we have gone without having one. Experts are predicting that a recession is likely. 94% of the world’s largest peer group of entrepreneurs and investors as well as 64% of National Association of Business Economists and Academics predict a recession in 2023.  

However, there can be a lot of optimism around a recession especially for a business owner like yourself.  There are more layoffs and job insecurity in the market.  We are already seeing this in the tech market. These shifts bring talent into new spaces and also create the joiners itch. Employees may want to start a new career with a company that can offer more stability and has a more fun environment than they might currently be in. Working for large corporations and watching teams of people getting laid off around can be draining. 

New market needs are going to favor better, smarter and cheaper business offerings. Smaller businesses can be more nimble to adjust business models and meet the demands quicker. 

Your competition becomes smaller in a recession. Those with unstable business models or plans for thriving through the down times tend to not make it on the other side. You can then win more business than you otherwise could. The grit of entrepreneurs shines true.  Entrepreneurs are resilient, talented and determined—tough times are built for entrepreneurs.  

How to survive a recession? Be disciplined and relentless in saving money but smart enough to invest where needed. Make sales your #1 priority.  

Interestingly enough, many economists are predicting deflation next year as well. Inflation and recession do not go hand and hand. We generally find price pressures reduced, they have to in order to accommodate personal and business budgets. 

Partner & Profit event, February 2-3 

The Electrical Association's 3rd annual Partner & Profit event is designed to help business owners prepare for the upcoming challenges.

We will be bringing in Ron Wirtz from the Minneapolis Federal Reserve to the annual conference where he will be giving construction and Minnesota-specific information to you all. 

You will also hear from a panel of tech school instructors who are listening to the future of the industry on a daily basis, what do you need to know to attract talent in a recession? 

What are contractors worried about? A contractor panel will provide insight into lessons learned and business best practices. 

Plus much more! Don't miss this one. Learn more!

Get in touch with me at (612) 252-2188 or email me at [email protected].