Initiation of a Start-up During Recession

General Motors was launched in 1908, the year of economic turmoil after the US had witnessed

the 'the Panic of 1907' financial crisis. Similarly, Burger King flipped its first patty when

America went into recession in 1953. And again, both Uber and Airbnb were born during the

global financial crisis of 2007-09. The economic downturn was like the Aladdin's lamp that

granted them the fortune of long-lasting life. Indeed, the problematic economic backdrops do

make people both more rigid and nimble for years to come.

Recessions are a harbinger of hard times. People lose their jobs, and companies get wounded up,

while the lucky ones make up for losses from their cash reserves. But did you know that start-ups

top the list to reach out to the benefits amidst all because, through their inherent agility, they can

take advantage of a weaker economy? To think about it, a start-up business begins with a prime

conception of valued customers. So when this inherently lean business model backs up their first

steps, their operations are already monitored by immense hard work for survival. And with that,

there is no going back.

Economic uncertainty is never a desirable situation. But if we positively take the consequences

of the Covid struck World, there is a significant rise in "necessity entrepreneurship". This term

was coined by Robert Fairlie, an economics professor at the University of California Santa Cruz.

He believes that there has been an increase in the economy because more people start businesses

due to the scarcity of jobs.

History shows how successful companies came up during tough times, and this cycle has been

running forever. Recollect the number of Google news updates you've received related to people

who are owners of a flourishing business due to the pandemic. Is there a possibility of the

emergence of promising start-ups from the entrepreneurial class of 2020? In fact, even the World

Bank has acknowledged that the global economy is set to expand by 5.6 percent in 2021, which

is the most robust post-recession pace in the last 80 years.

The 2020 downturn is evidently the most significant factor that rendered highly qualified,

talented and influential individuals unemployed. Therefore, when layoffs are rife, there are

higher chances of increasing your headcount with a set of extraordinarily skilled staff. Moreover,

your start-up will resonate with the bleakness of coronavirus and will provide you with a

business opportunity to do your bit to help defeat the pandemic. For instance, the domestic

production of PPE or personal protective equipment subsequently pegged at about 4.5 lakh kits

per day. This achievement of mammoth growth owes to domestic manufacturers who not only

got a source of income but were also able to rise to the occasion and helped India attain a self-

sufficient status through their production.

Undoubtedly, a business needs funding, and perhaps one cannot avoid the costs. But hey, don't

let this bog you down! There are higher chances of you, a smart owner of a start-up, meeting a

smart investor in the middle of a crisis. Many who hold a business model make them more

resilient to an economic downturn. Therefore, there are plenty of determined investors looking

for new business opportunities. These angel investors look to move their money out of the stock

market and are more willing to fund you if you hold promising prospects.

Most importantly, a grain of courage amid a pandemic can save you from the immense

competition waiting for the economy to rise. By promptly acting on an opportunity, you can

acquire the ace of spades in the market. For example, suppose you can build and grow a business

when customer confidence is at the bottom while other companies tighten their belts. In that

case, you will already stand bulletproof during the improving situation.