In the midst of this chilly recession that doesn’t look like it is going anywhere any time soon, there has been a lot of talk about how difficult it is to start, operate and grow a small business. But even the darkest clouds can come with their silver lining. Much emphasis could be made on the unique opportunities that result from such an economic climate. History attests to the fact that from the ashes of recession spring forth new ideas, opportunities, and insight.
Here are 8 reasons why our economic recession can be a good thing for small businesses:
1. Businesses are being forced to become stronger and more focused. In the quest to reduce costs, improve efficiency, and increase sales, small businesses are being forced to redefine and refocus themselves. As a result, many businesses are streamlining their operations, improving quality control, and expanding their customer relations.
2. Expansion comes at a discount. Small businesses looking to expand can take advantage of huge discounts in real estate, labor, materials, and stocks.
3. New markets are emerging. A change in the economic climate often signals a transformation in consumer demand and business needs. This shift in demand spells opportunity for anyone who has the foresight and resources to capitalize on it. So a homebuilding company or a cleaning company, for example, could make money refurbishing foreclosed homes, and a restaurant could offer economical menu options.
4. Demand for support will result in better products and services. As small businesses seek to reduce expenses and maintain their competitive edge, they will increasingly rely on various products and services to help them achieve their goals. Think telecommunications equipment and software, SaaS, cloud computing, and a whole range of outsourcing services- all of which should develop and improve in response to the increase in demand.
5. Small businesses are reaching out. Small business owners across the country and the world are joining forces to share advice, support, experiences, and resources. Much of this networking has been made possible via social networking sites and other online communities. Aside from the physical benefits that could come from such collaboration, even the emotional support that can be derived from these communities can go a long way towards helping small business owners and budding entrepreneurs.
6. Relationships with customers will strengthen. In order to hold on to their customers, small businesses are being forced to get to know them better. When businesses are in touch with the needs of their clientèle they are in a better position to accommodate any shifts in demand.
7. Businesses will find creative ways to get financing. According to the Small Business Administration, loans to small businesses have dropped 30% over the last year. This opens the door to the world of alternative financing that ranges from Peer-to-Peer lending and other sources of private equity, to factoring receivables, receiving a business cash advance, tapping private foundations, and even bartering.
8. Less competition from the big guys. Due to sluggish sales, several big US retailers, such as HomeDepot, Circuit City, Starbucks, Ann Taylor, CompUSA, and Foot Locker, have been closing their stores across the country. Put simply, this means less competition and more opportunity for small businesses.