I understand that many articles on this portal may not have an overly optimistic tone. We are going to see another crisis which will make every meltdown before pale. The feature of every economic depression is a jump in the unemployment rate. The society stops spending, companies receive fewer orders and workers are fired, unemployment is on the rise, as a result, the society stops spending and so on.
A crisis has also the good side. It is a form of a market cleansing from companies delivering sub-standard services and products. Many of us remember the period of 2005-2007 when consumers relied on dishonest developers. There was no choice, every single one of them had more orders than he/she could handle and this led to pathology – the quality fell and prices increased. The crisis changed everything. Market consisted of specialised companies upholding high standards no matter how much workload they were receiving. It is because of that, they built their brand and today a crisis means to them less profit but not filing for bankruptcy.
During times of crises, the demand for goods and services is shrinking. But all crises finally end. The economy returns to the path of growth. Decimated companies cannot catch up with a number of orders and they grow. Unfortunately, a productive capacity cannot be easily multiplied.
This is exactly the moment many of young entrepreneurial minds are waiting for. An investment in oneself - education - or your company will give you much bigger return on investment than tech-equities gave in the ‘90s. Having your own company means more than just knowing your market and its interactions. It is the knowledge which cannot be bought with money. On the other hand, it means fighting for a client from the dusk until dawn. Spending all weekends on thinking ‘what can I do better?’ How to bring more clients or introduce another product? Nothing gives you more satisfaction than seeing your company growing and your hard work paying off.
Storm clouds are gathering and many of us have to stop for a second and think – what do you want from life? Do you like your job? Maybe you would feel better as an owner, not as an employee? Designing a product, preparing your research is not done in a month. Same goes for accumulating sufficient capital. The majority of people are not saving any money – this short term thinking can be described as - I got a raise, I can afford more, therefore, I spend.
Every business requires capital. If you have a good plan and believe in your success you can borrow money from your friends and family. However, many circumstances in this scenario may drain self-confidence from you and the feeling of insecurity can be fatal to the whole endeavour. Savings allowing us to live on a comfortable level can be the safety net during the first year or two since the inception of our company.
We should use our conviction and realistic planning to bring ideas before investors and other entrepreneurs. Many of them see the volatility of equity markets and a guaranteed loss, NIRP when buying bonds. Their money set aside for a better occasion can be used to support our start-up. This solution has one disadvantage – taking someone’s money is less motivating than risking your own savings.
Where should I start?
First and foremost, what are you good at? What services or goods could you sell? Look for business having an unfair advantage, making it harder to copy. Talk to owners of other companies about your idea and ask them to criticize it. If they succeed and you lost all arguments – you should go back to design and improve the original version. It is better to lose an argument than money. Own your weaknesses and develop thanks to them. You still have time to prepare. The incoming crisis will create an economic vacuum which has to be filled by someone.