Should You Start a Business in a Bad Economy?

My 20-year-old daughter, Rachel, is embarking on a new business making boutique candles. She’s only just starting out and making them at night and on weekends, but she is really excited about it and has big plans. As we spoke about it, she asked me an important question that was causing her some concern. She asked,?“should I be starting a business if the economy is going bad?”?

My answer was instant and unequivocal. Yes, you should 100%. Start it, give it everything you have and see what happens. You will either succeed or you will learn valuable lessons for next time. Never let the economy or other external factors stop you from having a go. There will never be a ‘right time’. Find something you love, forget the fear and do it. Be the best at what you do.

I would also add that you should do this as early in life as possible. It is far easier when you are young and have fewer commitments. But even when you are older if you want to pursue something go for it. There’s nothing like the pressure of starting a business to focus you on the task at hand. These days with more flexible work, it’s much simpler to start a little side business and build it up while still having the safety net of employment. It takes hard work, discipline, and commitment but if you really want it, go for it.

Just because times are tough or going to become tough doesn’t mean that you shouldn’t start a business. It should have no bearing on your choice. There will always be opportunities and a business that starts in the depths of the toughest times is very well positioned to prosper as the economy improves and returns to good times later. That goes for the smallest businesses through to the biggest.

On my most recent podcast, I interviewed Rhian Allen, the founder of The Healthy Mummy. Her story is great! Rhian started the business in 2010 as the world was emerging from the GFC. She was 6 months pregnant and discovered a gap in the market in relation to fitness for mums. She left her job and sold her house to fund the business. Rhian sold the business in March this year for almost $20 million.

I circled back during our conversation and asked how she felt on day one of starting the business. Was she a little scared? Her answer was very much in line with everything I had learned about her and the energy she brought to the conversation. She replied?“no, I was just excited about doing something I loved. If it didn’t work out, I could start again.”

It reminded me of the time my wife and I packed up our little family of four kids in 2003 and embarked on the move from our hometown in Geraldton in country WA and moved to Perth. One conservative old Italian Aunty took me aside and said?“Dion, this is a big move, you’ve got a young family, what if it doesn’t work?”?My answer was instant:?“Then we will just get in the car and drive back”.?She gave me a pained expression and muttered something about it being a big move as she walked away shaking her head.?

It highlighted to me that many people perceive the risk to be high when it involves significant change but when you understand the worst-case scenario, the risk is actually quite limited. If you are the sort of person who becomes concerned about failure or having to start again then perhaps business isn’t for you. But where you understand the worst-case scenario, and you are ok with that, then take the calculated risk and go for it. That’s the opportunity.?

In their heart, most people know what they would do if they were guaranteed to succeed. Most hesitate because of a fear of it not working. So, I would ask, what would you do if you were guaranteed it would succeed? As the answer to that question is what you really want to do. Life is too short to let anything get in the way of that, including a bad economy.

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