Doing business in an economic downturn

If you think starting a business when times are tight is a bad idea, think again. It may well be the perfect time to finally launch your idea, says the Tauranga Business Chamber’s Matt Cowley.

The saying ‘never waste a good crisis’ sums up the strengths of small businesses when the economy cools and consumer wallets tighten.

When the good times are rolling, it can often be harder to grow and expand. You’re competing with many other businesses – often with more resources – trying to do the same. But during times of crisis, your competition is more likely to be cautious, creating new opportunities for your business in a less flooded market.

Yes, the strength of larger businesses is they can serve more customers at scale for a lower cost per unit. However, in a cooling economy, small businesses have the upper hand. Why? Because they can be nimble to the changing customer needs, whereas larger companies are held back with bureaucratic processes and shareholders to please.

If larger businesses retreat from less profitable areas, it creates a vacuum for small businesses to service those customers in new, innovative ways.

A good example of this is The Little Big Markets, which started when directors Rachelle and Christopher Duffy saw an opportunity to support local businesses in the aftermath of the 2008 global financial crisis. They discovered an unmet need for a gathering place for small businesses to connect with customers. People wanted a sense of community and family-friendly entertainment, as well as offerings that couldn’t be found in big-chain retailers.

While customers’ wallets are starting to tighten in this cost of living crisis, people still want to gather with friends and family. People are also spending more time at home – entertaining, working from home, growing their own veges – which creates a lot of new business opportunities.

Despite the current economic uncertainty, and contrary to what people might think, it’s never been easier to start a business.

While there are so many amazing free resources on the internet to help you start a business, the volume of information can be overwhelming, hard to navigate, and often not relevant to the New Zealand legal context.

If you are looking to become self-employed, or start a side hustle, I’d recommend getting in touch with the Tauranga Business Chamber. We provide a free one-hour session with an expert business advisor, thanks to funding from Tauranga City Council.

These independent, one-on-one sessions support those who are looking to start a business, or have recently begun a business and need some help. Anyone can access this service; you don’t need to be a Chamber member.

As the Chamber is the Western Bay’s business hub and champion, we also help connect you with further resources. We keep up to date with the latest Government support for small businesses, such as the self-employment grants from the Minister of Social Development. These grants assist eligible people, at risk of long-term benefit dependency, to start their own business.

If you’re an existing business, we have a range of other support available to help you grow, get better at cashflow forecasting, access leadership or other training opportunities, or simply connect with the wider business community.

Times are tough right now, but as another saying goes: ‘We’re all in this together’. If you’re seeking some extra help, I encourage you to reach out to our team and let’s see how we can help.

Article first published in Our Place Magazine

Learn more about the support the Tauranga Business Chamber offers business owners at all stages of their business journey.

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