Global Opportunities Beyond the Radar

Can You Grow A Business In A Recession?


Economic recessions are always unnerving, no matter what your status is at the time. A flourishing business can see its bottom line hit as consumer confidence topples. As an employee, you’ll wonder if your position is safe. As a business owner, you’ll be concerned about the possibility of making a loss. As a consumer, you’ll be troubled by the prospect of products becoming scarce or costing more as ingredients and items become harder to source. 

To some, it may seem, the last thing you’d be thinking of when a recession hits is the idea of growing your business. The conditions would seem to be dead against the idea of growing anything; recessionary times mean that the soil for growing a business is hardly fertile. But there may be reasons, and case studies, that show why a recession doesn’t need to be the death knell for your dreams of expansion.


Which types of business can grow in a recession?


A business that is looking to make hay when the sun isn’t shining will need to find something that makes them recession-proof. Or maybe recession-friendly. If you can find your way to offering services at a lower price – even if that means stripped-down services – then you will be attractive to customers who have less money to spend. The key here is not to try to offer premium services at a bargain cost. Even if it proves popular with customers, you will make negligible profits.



How can you grow in a recession?


One advantage of recessions is that it does become cheaper to borrow money, as economists tend to cut interest rates.  Borrowing in a recession is a nervy decision to have to make, but experts indicate that if you are borrowing to invest then there is some merit to making that decision. Be creative in how you structure loans; you may be able to borrow more for a smaller cost if you take a term life policy to cover loan repayments. Borrowing at any time entails an element of risk, but that doesn’t mean you shouldn’t seek to minimise that risk.


What should you always avoid in a recession?


A recession is not a good time to make speculative decisions. You don’t know how long the recession will be, nor what effects it will have going forward. Nobody could have been ready for a pandemic when they were considering an investment at the end of 2019. You can’t be sure that there won’t be another pandemic – and while governments are generally proactive in protecting investors when there are unforeseen circumstances, they won’t protect every investment. Borrowing to build inventory, become more sustainable and take on essential staff are three reasons that you can borrow even in a recession; new, sparkly offices are not.

Your business will always benefit from smart decisions made at the right time. There is, also, nothing to be gained from trying to stand still and let the recession bounce off you – it’s always going to come with some concerns for you no matter how risk-averse you are. Sober thinking and intelligent risk management are essential, and if you employ those you can certainly grow a business in a recession.


(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)

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