How to Start Up a Small Business in Unsure Economic Times

by / ⠀Career Advice Entrepreneurship Startup Advice / May 16, 2023
small business economic times

Crises and risky economic times are not new in the context of businesses. With inflation and the pandemic having impacted businesses, many entrepreneurs have had to change their ways of running their businesses. Economic phenomena like inflation can very quickly put an obstacle in your way. However, this doesn’t mean that it is impossible to run a startup business. It just means you need to make the right preparations.

The impact of inflation and unsure times on businesses

Consumers, businesses, and many others have felt the effects of inflation, which became very characteristic of 2022. This meant increasing prices on goods and services as well as producer prices. As a startup, you are already vulnerable if you haven’t gained a footing on the market. But inflation can make it even more challenging.

However, inflation can also be a mirror that reflects the problems which might have already existed in the business. Sometimes we need help to get a better picture of the situation. Luckily Sonary can help your startup get a better overview of the economic situation with a small business software. By teaming up with the correct software, based on your needs, you get the best software possible.

Consider your brand 

If you are yet to create a small business but wish to do it during a time of economic downturn, it is not impossible. Some business ideas are better than others, in terms of how well they can adapt to high-inflation economies. For example, by choosing to make a startup that focuses on custom work, you might have better chances of surviving the economy.

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It can be anything from producing bags to keychains, and you have the opportunity of setting the price depending on the cost of the materials. It is a good alternative to selling products with fixed prices, as you will need to keep more materials on hand.

Create a good business plan

A startup looking for success has to have a business plan. A business plan is a document where you write out the goals of your business and how you plan to achieve them. A business plan has to be very thorough as it will also include your plans for marketing. Some types of business software can help you create a business plan.

More importantly, a business plan is both for internal and external use. This can therefore be a way of attracting new investment, as they can see if you’re on the right track. In the future creating a business plan can be a way of securing the business in times of economic downturns. That way it can potentially be easier to recover from a big loss.

Get control of your budget

A central part of surviving high inflation is checking your business expenses and budget. This is undeniably a difficult part, as this can mean laying people off, but start from the bottom to the top. If you begin with energy-saving improvements, you can usually save a lot of money. On the opposite end, it is usually no good trying to cut costs to such an extent that the company can’t work effectively.

Making a strategy for the future, which is adaptable for times like a high inflation economy, is one of the best ways to secure the business. Being strategic about your spending can save you a lot of money in the long run.

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Incorporate automation

While inflation can be a difficult time, it can also be a time for reflection. If you haven’t already sought out the possibilities of automation, now is the time. By streamlining the workflows, you will save time as you won’t have to sit with endless hours of paperwork. Not only will it decrease the chances of mistakes, but it will also save you money in the long run.

Promote your startup

Competition is still key during difficult economic times as businesses are competing with each other to supply the cheapest products. Therefore, it is important to promote the business to new potential customers. Some businesses decide to use newer forms of social media, like promoting on TikTok. But it is important to target your customers on the right platform, whatever that might be.

Remember the connection to customers 

There are many reasons why it is important to remain good friends with customers. Customers can often accept that prices are higher because of inflation. However, this can still bother them and maybe even make them choose another business to trade with.

If there is anything that you can do to help the customers, this increases their chance of staying with you. For example, you might choose to substitute products with products of lower costs or offer bonuses to customers who have been with you the longest.

Accept the situation 

Sometimes it is necessary to accept the situation to move forward. While you might take as much action to hedge your bets as possible, high inflation is sometimes inevitable. Therefore, it is crucial to accept the fact that the business is a new startup. You might not scale the business immensely during the next year. But if you plan on running the business for many years, there are bound to be challenges.

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But there are also advantages to take notice of. As a small startup, you can easily track your spending compared to a bigger business. Also, there will be lower costs for a small business, so it won’t be as affected by inflation.

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