Over recent months, I’ve heard many reasons why now isn’t a good time to start a business.
The truth is, there’s never a ‘perfect’ time to start up.
There will always be challenges to starting a business, with or without a recession. But recessions also bring a wealth of opportunities. Opportunities to fix problems. Opportunities to innovate. Opportunities to adapt. Opportunities to grow.
As we look to rebuild communities, the economy and our world, small businesses will have a huge role to play. And not just to rebuild what we had, but to build better. Building the future of business.
Since we launched Virgin StartUp back in 2013, I’ve seen thousands of founders start-up and scale-up, and now is arguably as good a time as any to be doing just that.
Microsoft, Hewlett Packard and Burger King were all founded in recessions, responding to the opportunities their founders were presented with at the time. During the last recession, which began in 2008, we saw many more businesses start up and thrive – like Airbnb, TransferWise, WhatsApp and Uber - which have changed the way we travel, manage our finances and communicate with one another.
Entrepreneurially-minded people will always find opportunities – and that sometimes means being creative in a crisis.
Recessions are there for a reason. Something has usually gone wrong somewhere. That means there are problems to fix. Groupon was another company formed on the back of an opportunity that was spotted in a recession. It launched in 2008 to help companies move surplus stock that was left over due to a slowdown in consumer spending - and to simultaneously encourage customers back into making discretionary purchases again.
There will be, and are, opportunities out there now. I have no doubt that if we look back in ten years’ time there will have been countless successful innovations spawned, changing the face of business once again.
Even from within our own community, we have seen start-ups pivoting to successfully survive and thrive at this time. I’ve heard from many of our founders how they’ve been forced to reconnect with their start-up mentality, thinking creatively, adapting quickly and looking to achieve more - with less. Many of these new products, services and revenue streams constructed quickly during this period of pressure will outlast lockdown, too. It’s very much business as unusual for the start-ups we support – but, on the whole, they’re doing well.
Businesses like ChargedUp, which quickly pivoted away from normal service providing mobile charging stations in bars and restaurants, to providing hand sanitising solutions for the London Underground and beyond. Or M.Y.O., a creative space for adults in London, which launched virtual classes and Creative Kits for home. These have been so popular that a new side of their business has been spawned: The Creative Jungle Company.
There’s a huge amount of goodwill towards small businesses at the moment, with people consciously choosing to shop small. This presents another opportunity for founder-led businesses to tell their story and connect directly with their customers and followers. This is something that is much harder for bigger brands and can be a founder’s ‘unfair advantage’. Use it. Authentic human stories are more valuable than ever before if you’re thinking of starting up.
For enterprising people looking to create their new team, it’s also a good time. As unemployment increases, so does the talent pool they can recruit from – evidenced by the NotFurLong group of creatives that came together to support small businesses.
I also expect to see a lot of start-ups in sectors which are making large job cuts. With so many skilled workers being made redundant, it’s likely those with a commercial or innovative eye will join forces to create opportunities their former employers couldn’t – or maybe wouldn’t.
The barriers to starting a new business are low. Support to do so and the tools you need to succeed are readily available, often for free or at a low cost.
At Virgin StartUp, we’re seeing a rise in would-be founders looking for support to get their ideas off the ground. In the coming weeks, we’ll be showcasing some of the amazing new businesses that have sprung to life during the pandemic – from wine retailers, to retreats.
Things will recover. ONS figures show it took the UK economy five years to recover fully from the 2008 recession, and it grew by a further 11% in the five years from that. Expectations are that this recession will cut deeper. The road ahead is long, but there will still be plenty of opportunities for growth. What’s more, you’ll have a great story to tell.
Andy Fishburn is Managing Director of Virgin StartUp.