These are challenging times with the second wave of COVID-19 hitting different parts of the world. While healthcare services are stretching their limits and people are isolating at home, a global economic recession seems to be on its way.
An economic recession is a period of time in which the GDP (gross domestic product) declines for two or more consecutive financial quarters.
Wondering what it means for the business world?
An economic recession disrupts the healthy economic cycle, leading to:
➔ Loss of business
➔ Decreased consumer trust and spending
➔ Lower revenue generation and profits
➔ Lower business productivity
When this happens, a lot of businesses adjust their strategies to make ends meet and keep going. In such a scenario, should you consider starting a new business?
Let’s find out.
Should You Start a Business During a Recession? 5 Ideas to Consider
While most people will suggest that you cut down your living expenses and sell unwanted stuff, the best way to withstand an economic recession is to make more money.
How can you supplement your income?
While the pandemic has affected earnings, the imposed lockdowns have also helped reduce living expenses. You can leverage part of your savings to start a business as a side hustle and build a passive income stream.
We are not talking about investing in a huge office space or a new factory. Instead, you should choose a business idea that requires low investment and has a higher potential of driving conversions.
Before you decide on a business type and start offering your products or services, take advantage of the business formation services of GovDocFiling
to register your business. This step is important and will make sure that you are authorized to do business in your state.
Want to learn about the kind of small businesses you can start during a recession?
Let’s take a look at some of the small business ideas that you can start without compromising your everyday lifestyle.
1. Start a Dropshipping Business
Starting a dropshipping business involves selling products from a third party. Then, when a customer places an order online, that third party will ship the product(s) directly to the customer.
A dropshipping business is easy to set up and manage. You don’t need any large capital investment to resell another business’ products. It saves you from the hassles of product manufacturing and inventory management. Also, the risk is quite low.
How to get started:
➔ You can easily set up a dropshipping store on platforms like Shopify.
➔ Optimize your Shopify account - add payment options, create store policies, decide on shipping rates, etc.
➔ Focus on creating a good storefront design using free themes, widgets, and customization options.
➔ Register your business and launch your dropshipping store.
➔ Source products from different brands and list them on your store.
➔ Create a marketing strategy and promote your products through social media, emails, and other channels.
➔ Start making sales.
2. Start a Blog and Monetize It
Another great small business idea to start during a recession is to start a blog. Choose a niche that you’re good at and passionate about and start publishing useful content related to your niche.
It’s easy to start a blog using tools such as WordPress, Blogger, and Medium. The challenging part is to create valuable content that people will love to read and share.
How to make money from your blog:
➔ Monetize your blog traffic by running ads on your website. You can sign up for Google AdSense and other advertising networks to get started.
➔ Sell your own services or products using your blog.
➔ Sign up for the affiliate programs of brands you trust and start promoting their products and services using a unique link or code. When a consumer buys something using your link or code, you will earn a commission as an affiliate.
➔ Once you’ve built a decent readership, you can also charge other companies in your niche to publish sponsored content on your site and give a link back to their site.
3. Start a Cleaning and Sanitation Business
People are becoming more conscious about their health and hygiene these days, which can lead to an increase in the demand for cleaning and sanitation services.
The best part about starting a cleaning business is that it is cost-effective. You just need to buy the necessary cleaning supplies and equipment. When starting out, you can hire as few as one or two cleaners who can offer services to clients in your neighboring areas.
As your business grows, you can employ more people and scale your cleaning business.
4. Begin Freelancing
Whether you’re a content writer or a graphic designer, it is super easy to begin offering your services as a freelancer. You just need to build an online portfolio, sign up for freelancing platforms, and start looking for work.
How to get started:
➔ Identify your strengths and weaknesses and what you’re best skilled at.
➔ Sign up for freelance platforms such as Upwork and Fiverr.
➔ Build your profile and online portfolio to showcase your expertise.
➔ Decide on your services and pricing. Do you want to bill clients according to an hourly rate or want to charge them per project?
➔ Publish content related to your niche and area of expertise on LinkedIn to attract potential clients.
➔ Find work and focus on building long-term client relationships.
➔ Deliver good quality service to get good ratings and attract repeat and referral orders.
5. Become an Influencer
Another promising business idea to start during a recession is to become an influencer. You need to choose a niche, provide value, and build authority in your niche. Then, relevant brands will pay you to promote their products and services to your followers.
While you can choose to become an influential blogger or YouTuber, Instagram is one of the most popular platforms for influencer marketing.
How to get started:
➔ Choose a niche - travel, fashion, marketing, adventure sports, etc.
➔ Choose a platform - Instagram, YouTube, your own website/blog, etc.
➔ Create valuable content to attract people with similar interests.
➔ Reshare interesting and relevant posts from other creators.
➔ Use the right hashtags and location tags to amplify your content’s reach.
➔ Publish product reviews for the products you use often. Be authentic.
➔ Organically grow your following and reach out to brands for paid partnerships.
Ready to Start Your Small Business?
A recession is undeniably a time of high crisis and impacts everything from people’s lifestyles to businesses. But there are some businesses that can thrive even during those tough conditions and some that are also easy to start.
In this article, we’ve shared some of those business ideas that will continue to generate revenue both during and after a recession.
Do you need help starting a business from scratch? Connect with our business formation experts for help.
Brett Shapiro is a co-owner of GovDocFiling
. He had an entrepreneurial spirit since he was young. He started GovDocFiling, a simple resource center that takes care of the mundane, yet critical, formation documentation for any new business entity.