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Andrea

Business

Why a Recession Can Be a Good Start to a Business

Reading 5 min Article Intermediate


Vocabulary - 13 nouns, 1 verb, 4 adjectives

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 , it comes in the form of a recession.

Read on to learn more!

What is a recession?

A recession is a period of low . 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 , the World Bank predicts the 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 .

Just look at FedEx, Uber, Airbnb, Disney, and Microsoft. They all began in times of !

So, what are these advantages?

Weaker competition

In a healthy economy, more and companies are hard to with. But during a recession, most of those companies are . With weaker , new businesses have a better chance of .

More

To encourage people to spend money during a recession, banks and card companies often lower their rates. As a result, with new businesses may be able to get more with lower fees.

When recessions happen because of a global event or major crisis—like a , for example—it’s a great time to explore . 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

who start a business during a recession have to be creative with their ideas, , and right from the beginning—just for the company to survive. After the recession, as the business grows, this creativity will have made them more than others!

A good idea?

Starting a business during a recession has advantages. Would you go for it?


Recession Comprehension