Exercise
Tap all the highlighted words in the transcript below to see their definition. ⇩“In the middle of difficulty lies opportunity.” – Albert Einstein
These days, it seems like we’re in the middle of a lot of difficulty . . . so, where’s the opportunity?
For some entrepreneurs, it comes in the form of a recession.
Read on to learn more!
What is a recession?
A recession is a period of low economic activity. It’s usually due to decreased spending: As people spend less, businesses begin to lose money. Recessions can happen for many reasons, like COVID-19, for example.
The current situation
Because of the pandemic, the World Bank predicts the global economy will decrease by 5.2%. It hasn’t been that bad since the end of World War II.
Despite this, new businesses are still being started. In the last week of May, more than 67,000 applications were submitted for new companies in the US—21% higher than the same week in 2019!
But wait: Isn’t it a terrible time to set up a business?
The right start
Believe it or not, recessions can offer several benefits to startups.
Just look at FedEx, Uber, Airbnb, Disney, and Microsoft. They all began in times of economic downturn!
So, what are these advantages?
Weaker competition
In a healthy economy, more established and profitable companies are hard to compete with. But during a recession, most of those companies are struggling. With weaker opponents, new businesses have a better chance of survival.
More credit
To encourage people to spend money during a recession, banks and credit card companies often lower their interest rates. As a result, entrepreneurs with new businesses may be able to get more credit with lower fees.
New markets
When recessions happen because of a global event or major crisis—like a pandemic, for example—it’s a great time to explore new markets. Think of all the businesses that now sell safety products like masks and hand sanitizer. They saw a need for certain products and got to work!
Strength through creativity
Entrepreneurs who start a business during a recession have to be creative with their ideas, operations, and funds right from the beginning—just for the company to survive. After the recession, as the business grows, this creativity will have made them more resilient than others!
A good idea?
Starting a business during a recession has advantages. Would you go for it?
Recession Comprehension
There are always opportunities to explore and apply. The key concern, since my point of view, is to dare to do it one at least. But there are several conditions that influence the decision. Analyzing without paralyzing.
this is a particular time
Cruz
Cruz
Hi everybody! I disagree with the credits situations. It’s true that in COVID‘s crisis the Federal Bank and the European Central Bank are giving facilities to banks to minimize the interest rates. But in other crisis, for example 2008 crisis, this didn’t happened and the banks didn’t give credits to entrepreneurs.
Despite all this, I think this reading is accurate to encourage people to became an entrepreneur. And that is very important, because we mustn’t be afraid about a crisis.