Tips for starting a business in a recession
There are many schools of thought in relation to setting up a new business during a decline, especially since the UK has recently made history for the record for the longest running recession since records began.
But for some, the timing couldn’t be better. If you’re on the brink of starting up and you’re looking for some extra tips to help keep you in the black, take a look at these useful tips and words of advice from experts in the start up community (Source: CNN).
1. Cheaper office space… Costs are generally lower in a recession, which means that necessities such as office space are more affordable. David Lester, founder of Startups.co.uk, started his first business during a recession, and this also meant that his employees were expecting lower salaries.
“For almost all business that start up it takes longer to build sales than they expect, but if you can adjust expectations it’s much cheaper to start in a recession and work towards a long, slow build.”
He also says that start-ups should be flexible in their approach, and consider the likes of a serviced office to help keep costs down, as well as hiring temporary staff on short-term contracts.
He says: “Don’t commit to a five-year lease on an office – there’s plenty of very short term office space around. Rather than taking on a lot of employed staff, work with consultants and freelancers.”
2. Consider a virtual office… For businesses in the early stages of trading, it’s often beneficial to start off by working from home, which can also be coupled with a virtual office. Sophie Kummer from the Federation of Small Businesses says:
“Working from home means you don’t have to pay overheads. The recession is also a good time to think of energy efficiency – fighting climate change and saving money go hand in hand.”
3. Stay focused… A recession encourages a more focused approach, and makes entrepreneurs consider many angles to make sure their product is perfectly placed. Hayley Williams of the National Federation of Enterprise Agencies says that this solid grounding will also come good in the future, once the decline has eased.
4. Test the water… Williams also says that people who start a business in their spare time (such as evenings and weekends) are able to test the water by starting off part-time.
She says: “The recession means that some people are playing it safe, making sure they can build a business on sound principles before quitting their job and going it alone.”
5. Lay down the ground rules… Be clear on payment dates to avoid any misunderstandings. Sophie Kummer says:
“Some big businesses will lean on smaller suppliers, using small businesses as a kind of credit. To prevent late payments you must be very clear about which date you need to be paid by.”
How to get help on finding affordable office space… If you’re starting a business, get in touch with one of our consultants at officebroker.com to get free help and advice in finding a suitable office.
Our team specialise in matching small and medium-sized businesses with flexible, low-cost offices that are available for anything from two weeks upwards, and starting from just one desk. Serviced or managed offices are geared towards smaller businesses, and offer a great range of facilities often rolled into one manageable monthly cost.
Search online at officebroker.com to get started, or speak to one of our experts direct to find out more.