Perhaps you have heard of the business cycle. If not, here’s a very rough description:
The business cycle is basically a fluctuation in the economy that shows a trend of growth and then of decline. During the decline, we hit recession, which is, of course, where we are now. During growth, think five or so years ago, we are at the top of our game and people are spending.
Some people fear that during this time of recession, on the downturn, opening a new company could be a vast mistake. The concern is, of course, that people are not spending as much to purchase items and services and, therefore, a business started during a downturn will not succeed.
A business needs customers to be successful; a poor economy means fewer customers, right?
Not always. In fact, women right now are managing to start companies and, among those who have been in business a while, the company is not only staying afloat but growing despite the economic downturn.
In the next few weeks we’ll be talking with some of these women in business and learning the secrets they feel have kept them successful despite lower consumer spending.
Today I wanted to begin with someone who recently started a new company in the face of recession.
In August of 2008, with a newborn and a three-year-old in hand, Alison Wisnefski, a stay-at-home mother who had once worked as a consultant in the contract staffing industry, took the plunge and became a business owner.
Wisnefski, along with her husband, started Just Weddings, which connects brides with bride consultants. These consultants then match the brides with professionals in the network best suited to handle their needs.
Starting a company in the midst of the recession scared Wisnefski at first, but, she says, “We felt the wedding industry is in many ways recession-proof.”
When she spoke to brides about their plans and the economic issues facing them, brides said that while they weren’t going to spend a lot on weddings, they certainly weren’t going to wait for the recession to end before getting married.
You see, people still need things even though the economy is bad. People still go out and do things (movie ticket sales are on the rise, for example). People still purchase items such as groceries, clothing, and furniture.
We may not be spending as much, and we are second- and third-guessing our needs before we spend the money. But we are still spending.
Wisnefski’s advice about business ownership at this point and time? “If you are starting a business now, try not to get distracted by all the talk of how bad the economy is.”
What are some of the benefits of opening a business when times are tough? These might include:
- Lower rents for better office spaces. Since businesses are not filling up vacant buildings, rents are cheaper. Companies are also downsizing, which one of the business owners I interviewed this week mentioned. She was able to move her company into a larger space when another business vacated.
- People need jobs. Some of these are excellent employees who would not be available in better times. Take advantage of this if you are opening a company during the recession.
- Find a niche. As Wisnefski found, people are going to get married despite the economic times. Another woman I interviewed owns a family-style restaurant, and she said that those who are going to eat out want quality and affordability. Since her company provides this, she is actually experiencing growth and will soon be opening a sixth restaurant. Focus on what will not stop despite the bad financial times.
- Spend money on marketing. This is one area in which some businesses scale back on, but every woman in business who is succeeding has agreed that marketing is key. You have to reach people, and people need to know you are there. Most of those I spoke with are gearing their marketing to the economy.
- Be flexible. Understand that your original idea may not work in today’s times, but that a possible slight change could attract a larger number of people. Go in with a plan, but understand you might need to change that plan at some point.
Yes, the economy is bad. We understand that, as do the women business owners to whom I have been speaking.
But, Wisnefski advises, this downturn can actually be used as a benefit to the business owner. “Sometimes the best time to get in to business ownership is when others are getting out. Playing it safe isn’t always the right way to go.”
We will be following Wisnefski over the next year to see how she does, and to listen to the advice she can offer aspiring, new, and experienced business mothers in these tough times.