Can you launch a business in a Cost of Living crisis?

If you’re wondering whether it’s risky to launch a business in a Cost of Living crisis, we have some guidance to help you decide if you should go for it.

Do you have a brilliant business idea, but you don’t know whether now’s the right time to get started? With interest rates increasing and consumers spending less, we get it. It’s a scary time to be making business decisions.

We have news for you, though. This could be your golden opportunity. Take it from Airbnb, Groupon and Netflix, who all started during the 2008 recession. Here are some top tips for starting your business during the cost-of-living crisis.

Find your niche

So you’ve had your business idea. Now what? Well, most business owners will tell you that it all starts with a strong business plan, which includes deciding on your big idea, understanding what other similar businesses are out there, knowing your potential customers, and calculating the costs of running the business. While this is true, there’s something equally important to think about: your niche.

It’s a good idea to find a gap in the market; to find space where you can provide something no one else is offering. Checking out what other similar businesses are doing and working out how you can do it differently is key. You could even ask friends or family for feedback on your idea, to see if there are any changes you could make to really help your business stand apart.

Think long-term

That being said, we’d encourage you to think about the long-term. Filling a gap in the market is great, but will there still be a need for what you’re providing once the crisis ends?

So that you’re prepared for whatever comes your way, having a backup plan is a good idea – something to fall back on if people no longer need your product, or if you don’t have enough customers to break even. Every company, from those with just one employee, to those with thousands of staff, should have a back-up plan.

Look into support for new businesses

Help is out there. Wherever you’re located, have a look into the options available to you.

Most European countries encourage and support new businesses. Take the tax incentives in France, the Ambitious Entrepreneurship Action Plan in the Netherlands, and government funding for small businesses in Norway for example.
After all, businesses encourage people to spend, which can help to get the economy moving and back on track.

Tap into the workforce that’s ready and available

Letting employees go is one of the downsides of companies cutting costs during the cost-of-living crisis, but this could create an opportunity for your new business. Since more people are looking for work, there could be a pool of talented people at your fingertips.

Not only that, if there’s a certain job you can’t do yourself or would like some professional help with – like developing your social media presence or creating a website – and you need ad hoc rather than full-time support, then outsourcing to freelancers could be an option. People with specific skills, who aren’t permanently on the books, could be your ticket to getting your business off the ground without the fear of supporting full-time employees.

We’ve already written a helpful article on how using contractors could be the secret to improving efficiency, but with freelancers making up a quarter of digital talent in Europe – approximately 2.8 million people in total – there’s no doubt that the expert support you need is already out there.

Take advantage of being flexible

As a new business, you have the great advantage of being able to move and react in ways that larger or more established businesses can’t. So, if you notice that people are spending differently or see an emerging trend that you could tap into, use this flexibility to your advantage and make changes. It’s all about being adaptable and moving with the times.

Should I consider launching my business during a Cost of Living crisis?

It’s a yes from us – and we’re here to help you get off the ground. Our knowledge centre is packed with articles for businesses that are just starting out, with advice on social media, technology, security and more.

Need help now? For one-to-one support, speak to our V-Hub Digital Advisers who are always on-hand to chat through your questions.

For more getting started tips, take a look at how to protect your business from cost-of-living price increases.