The Benefits of Recession for Business: Reasons to Consider Entrepreneurship Today

Discover the benefits of starting a business during a recession. Access to resources, innovation, lower competition, and flexibility can help you succeed.

Should You Start a Business Today?

Entrepreneurship during a recession? Who would consider starting a business in a sluggish or retracting economy?

You know, we’ve experienced our fair few shares of difficulties in recent years. Many people have lost their jobs, or become disillusioned with work. Many remain dissatisfied with their careers and are harboring thoughts of starting a business. But they’re fearful of doing so, especially in such an uncertain economy.

Sure, we face significant risks and challenges today. But where there are challenges, there are opportunities for new businesses to thrive.

Are you uncertain about starting a business during a recession? You’ll be surprised at what benefits of a recession could prove to be to your advantage as an entrepreneur.

The benefits of a recession for new businesses

Yes, there are challenges to new businesses during a recession. And we shouldn’t forget these. It can be hard to raise capital. Managing cash flow can be difficult. Then there is the uncertainty caused by layoffs and lower wages – where is your business coming from when consumer confidence is low?

Despite such challenges, many successful businesses have been started during a recession. In fact, around a quarter of Fortune 500 companies were launched during periods when the U.S. economy was retracting. Examples of hugely successful companies that were created in dire times include:

  • FedEx (oil crisis of 1973)

  • Hewlett-Packard (Great Depression, 1935)

  • Charles Schwab (market crash of 1974 – 1975)

  • Costco (recession in the late 1970s)

  • United Airlines (1929)

  • Microsoft (recession in 1973 – 1975)

And this is only a handful of hundreds if not thousands.

Let’s look at the opportunities that starting a business during a recession could present to you.

Access to Resources

To start a business successfully, you need resources. Office space or business premises. Equipment. Labor. When the economy is booming, all of these are in scarce supply, and they are costly. Recession makes these resources more plentiful and less expensive. If you wish to build a talented team, a recession could be the perfect time to recruit.

Plus, government grants and small business loans may become easier to access, too.

Necessity Breeds Innovation

Businesses need to be innovative to survive and thrive. This is especially so during tough economic times when the need to be innovative just to survive is at its height. When you start a business during a recession, you have to be innovative. And that becomes inbuilt within your company culture.

Lower Competition

You’ll face less competition during a recession. Fewer people are willing to take the plunge because they are so fearful of doing so. Existing businesses are focused on survival. Consequently, there is less competition in the market for your services or products. This lack of competition could negate any fall in consumer confidence, and actually increase your chance of success.


Entrepreneurs who launch a business during a recession must be agile in their approach. They’ll make fast decisions, and even pivot their business into new niches. They tend to be resourceful and nimble with expenses and cash flow. Again, this becomes part of your business culture – and this ability to make swift decisions will help you navigate any economic challenges in the future.

But What About Today? Is It Worth Considering Entrepreneurship in Today’s Context?

Starting a business in a recession may be daunting, but there is a hatful of benefits when you do so. Better access to cheaper resources is only the start. Starting a business in an uncertain economy can help breed the culture that will see your business survive through all economic conditions – innovative and flexible businesses are more able to take advantage of lucrative opportunities.

If you are considering starting a business, now could be the perfect time to take the leap into entrepreneurship. Still not sure where to start? Take our free franchise assessment, and discover your strengths as an entrepreneur and business owner.

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