When the winds of change blow, some people build walls, others build windmills. Only archetypal innovative entrepreneurs with unbridled mindsets can overcome the endless encumbrances of a recession.
These entrepreneurs know the art of turning loopholes into business opportunities -the proverbial – ‘turning a lemon into a lemonade’ they succeed where others fail.
So how do you succeed as an entrepreneur in a recession?
But first let’s get to know what is an economic recession?
An economic recession happens when the economy spirals downwards. The decline causes negative impact on key areas of economy – unemployment, the stock market, and the housing market.
Contributors to recessions.
And, what causes an economic recession?
Understanding factors that contribute to a recession is what sets apart entrepreneurs who flourish in an economic downturn.
The first factor is: extremely high-interest rates.
When interest rates threaten to go through the roof liquidity suffers. They limit liquidity in the market.
What follows next is Inflation, which reduces the public’s purchasing power.
Hot on inflation’s heels comes reduced customer confidence as wages plummet, and lifestyles are shaken.
What skills should an entrepreneur consider adopting?
Recessions are devastating, they hit like an unforeseen hurricane, entrepreneurs who aren’t prepared, and get swamped. Their Businesses flounder and in some cases shut down.
How do you protect your business?
It is vital as an entrepreneur to adopt survival skills to weather the storm. What are these Skills
1. Become a risk-taker.
Not stupidly of course. Here is what I mean, read the business landscape. An example of this is what happened during the pandemic. There was a tumultuous shift in everything as we knew it – Entrepreneurs who didn’t read and adjust to the economic landscape became extinct.
A willingness to take fearless risks will see you take off in a direction your competitors have no clue about.
As you stride down that unbeaten path, you will face less competition,
competing entrepreneurs faced with loss-making prospects will back down in a bid to shun losses, don’t.
2. Set a floating monthly revenue figure for your business.
Set a floating monthly revenue figure for your business. The reason is that during a recession your customers too are affected. As their purchasing power is eroded, your business suffers. Having a floating monthly revenue will ensure you adjust and lower this figure during a recession and re streamline your businesses expenses
3. Be creative
The old adage, ‘Necessity is the mother of invention’ holds true as an entrepreneur think of solutions to problems and adapt as need be.
Grab opportunities quickly. Turn them into business ventures. For example, when the pandemic struck, we experienced a shortage of masks and PPEs. Online meetings became vogue, and in came zoom.
The entrepreneurs behind these businesses and many other pandemic-born businesses saw and grabbed the opportunities brought about by what others perceived as a calamity.
As more joined to cash in the opportunities, creative entrepreneurs iterated. For example they started producing reusable stylish masks instead of ordinary surgical masks, interestingly they sold more, making a fortune at a time when the rest of the world was locked in.
4. Don’t be driven by external factors
You shouldn’t be overly worried about things that are out of your control. Factors like government policies, inflation rates, and fiscal laws that affect your business, don’t beat your head against the wall, navigate around them.
Focus on what you can control. For example instead of mopping about reduced sales due to inflation, market your products more.
5. Seek Mentorship
I wouldn’t have done you a favor if I didn’t mention this, you need a mentor, all successful entrepreneurs have a mentor or several mentors, people they look up to and learn from.
Seek mentorship from entrepreneurs who have gone before you have done it and live it. They have a trick or two up their sleeves that may turn your fortunes.
In conclusion, the gap that separates entrepreneurs with an unbridled passion for business from those who fail during an economic recession is their ability to develop a quintessential entrepreneurial mindset.
Are you a quintessential entrepreneur? go out there and kill it – Good Luck!!!