MBA2265 Q&A Wednesday: Is a recession a bad time to start a business?

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Hey oh. Welcome to the Hundred Doll Ba Show. Business truths to deliver daily, every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar is at home. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and today's episode is Q and A Wednesday. On Q and A Wednesdays I answer a question from one of you, one of our listeners. If you got a question you want to ask, go ahead and email me over at omar@100mba.net Today's question is from Nelly and Nelly asks. Hey Omar, love the podcast. Got a question for you. I'm thinking about starting my first online business but I'm highly aware that we're in a recession. Is it a bad time to start a business during a recession? Is it better for me to wait 12 to 18 months or should I jump in and get started right now? Would love your take. Thanks Nelly. Absolutely love this question from Nelly because many people worry if the economy is bad and people are not spending their money because maybe it's not a good time to start a business, why would anybody buy my products or services? But I'm here to tell you that starting a business during a recession is probably One of the best times I started many of my businesses, including Webinar Ninja and the $100 MBA, during a recession. It wasn't intentional, but there are advantages. Plus, I'm always in favor of getting started. And I'll explain why. Not just because I want you to be an action taker, but when it comes to business and getting started, time is not on your side until you get started. I'll explain in today's episode. So let's get into it. Let's get down to business. During a recession, many big businesses don't make it. Many mom and pops don't make it. Many smaller businesses don't make it and close their doors. A big reason is because they just can't pay for all the expenses they need to run their business. Many of these businesses have been running for years, sometimes decades, and this is just the cyclical nature of an economy. But if you're starting a new business, this is actually good news. No one wants to see anybody go out of business. But this makes competition a whole lot less, and it makes it easier for new businesses to actually get business to compete and earn customers. It's less crowded, it's less noisy, and it's easier for you to acquire the customers you need to get started. Here's the thing. When you start a business your first six months to a year, you're just trying to establish your audience. You're starting to grow your email list, trying to establish what your customers want and need. You're tweaking your products and services, you're improving your website, and maybe you're earning some money and that's great. But most businesses don't really hit the ground running and start having explosive growth until a few quarters in. This is why it's a good time to start a business. Because by the time your business has product market fit, meaning that you've honed in your product and you're offering to your customer to the point where you know, okay, this is exactly what people need at this price point, at this offer, at this packaging. By the time you get that right, the economy will be back on an upswing, people will have a more disposable income, and people will be willing to spend a whole lot more. Now, having said this, even right now, it's not like people are not spending money. And there's a lot of people that have a lot of money and are willing to spend regardless of the economy. But most of all, with any online business, with your first year or so, your expenses are quite low. You don't have a whole lot of traffic, so your server costs are low. You're not serving a whole lot of customers, so your expenses are quite low. So you are not spending a lot of money, which is great during a recession. As you start growing a customer base and your expenses go up, you'll be able to afford it because you're making money, your business is getting traction and the economy is making a turn. Some of the biggest companies started out of a recession. Companies like Airbnb, Eventbrite. When there's a recession, there's opportunity. People are looking for different ways to spend their money. They're trying to be smarter. They're looking at other options. They're not stuck in their routines of just doing what they always do or buying what they always buy. They're a little bit more selective, which means this gives you an opportunity to stand out and be one of their new options. And that leads me to some of the tips I want to share with you when it comes to starting a business during a recession. My first tip is to focus on personalizing your business. Grow a personal brand. Focus on making it yours and standing out. People love buying from people, so don't be afraid to show your personality through your business, through your brand, through your website. This really helps. And I'm speaking out of experience when it comes to making a mark, having people remember you when they see you online. My next tip? Get scrappy. One of the things I love about a recession is it forces you to really get scrappy about your marketing. Have a grassroots bootstrapping mentality. This means not trying to cast a net so wide. That means working on one niche at a time, focusing on targeting a niche that you can serve best, and then moving on from there. The great thing about that is that when you just focus on a small niche in your market, it's not that expensive to market to them. But in that niche, you become the leader. They think you're everywhere and they tell other people and it helps you grow organically. So don't be afraid to roll up your sleeves and get on some podcast interviews, to do some SEO, to write some blog posts, to speak on stages, to do webinars, to do workshops, to serve your people. Tip number three Grow steady, grow slow. Many businesses I've seen along the way just implode because they try to grow too fast. They spend way too much trying to over market and over hire. Don't do this. It's better for you to grow slow and steady and still be around in 10 years. My final tip. Stay flexible. Don't fall in love with your business idea. Fall in love with serving your customer. Sometimes that means changing your idea, pivoting, improving it, and catering it to your customer's needs. As you start your business, as you start talking to customers, as you start serving them, you'll start learning what they actually need. And you may need to change your product or service you're offering, or even your whole business altogether. And that's okay, because the end goal here is to have a successful business. And in order to do that, you need to have happy customers. And to do that, you have to serve them properly. We think we know what's best until we enter the marketplace and start learning what reality really means. It means solving your customers problems the best way you can and not being precious about your business model or your business idea or what you initially thought your business should look like.

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Today'S Q&A Wednesday's question from Nelly, go ahead, get started. Grow slow, grow steady and take advantage of the fact that that people are looking for new opportunities and new options. Thanks so much for asking your question Nelly on Q and A Wednesday. If you got a question you want to ask, go ahead and email me over at Omar MBA net and I'll make sure to answer it right here on Q and A Wednesday. If you love this podcast, do us a favor. Share it with your friends and family. Go ahead and share it on social, Facebook, Twitter, Instagram, you name it. Just Send them over to 100mba.net and let them know the show rocks. Thanks in advance for doing that. Before I go, I want to leave you with this. Remember I said time is on your side until you get started. Well, most entrepreneurs, their biggest regret is not starting earlier. You got to get started. You got to get out there. Because as soon as you start, you start learning, you start improving, you start growing. But if your business still lives in your head, it's not real, it's not in the world. And you're not moving forward. So get started and have time on your side. Thanks so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care. Of hey Fidelity, Can I get a.

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