Why a bad economy is the best time to start a business

A lot of people used to asked me when is the best time to start a business. My answer is always: “Now!” Yes, why wait if you can start now. Then they continue asking: “Even in this bad economy?” “Why not? In fact, this might be the most suitable timing!” Let me tell you why……

A recession can be a terrific time to start a business. In fact, nearly 60% of Fortune 500 companies began business in a bear market. Time of economic woe don’t mean you have to tuck-in your entrepreneurial spirit and settle for whatever job you can get. Economic slowdowns can be prime opportunities to get your startup off the ground.

But don’t count on an easy time getting angel investors and venture capitalists to flash you the green. They’ll be too busy licking their wounds and managing their losses to throw funds at any old lemonade stand on the corner. You’ll likely start off with less resources than normal, but if you’re frugal, and understand your market, you can turn economic lemons into lemonade.

As a founder, you are an investor too. You’re buying stock with work: the reason Larry and Mark are so rich is not so much that they’ve done work worth tens of billions of dollars, but that they were the first investors in Google and Facebook. And like any investor you should buy when times are bad.



Here are why it’s worth to start business during downturn

Lower start-up costs: You can start off with less capital.

Competitors are getting their butts kicked: Your competitors are too busy for restructure and seeking methods to survive.

The market will get healthy again: No recession is permanent. The market is cyclical.

More talent on the market: The recession will put tons of experienced, talented people out of jobs.

People want innovation: Recessions create problems. Everyone is looking for solutions.

Downturns give startups negotiating power: Lower interest rates, cheaper credit.


There are plenty of reasons to start a business during a downturn, and plenty of business models that are considered recession-proof. If you’ve got the tenacity and motivation to make it happen, a downturn is a great time to shed the corporate lackey life and go to work for yourself.

The succeed or fail of the business based on the qualities of the founders. Which means that what matters is who you are, not when you do it. If you’re the right sort of person, you’ll win even in a bad economy. And if you’re not, a good economy won’t save you.



So maybe a recession is a good time to start a startup. It’s hard to say whether advantages like lack of competition outweigh disadvantages like reluctant investors. But it doesn’t matter much either way. It’s the people that matter. And for a given set of people working on a given technology, the time to act is always now.

Don’t let a down economy rain on your entrepreneurial spirit. You don’t have to settle for underemployment just because things aren’t looking up; if you’re smart, savvy and brave, a recession can be a blessing in disguise.