The pros and cons of starting a business during economic fluctuations
In times of economic volatility, although challenges will increase, this is often the birthplace of business innovation, startups, and new companies. In this case, demand is the driving force to fill the market gap.
However, as any entrepreneur will tell you, starting a business is good enough in a good economic situation, and starting a business in times of economic volatility will be even more difficult. But aside from the difficulties, many successful startups have grown up in the ruins of the economy. For example, after the outbreak of the financial crisis in 2008, both companies and individuals became more frugal. This trend led to the establishment of Groupon and Uber. Sometimes, the crisis may become a catalyst for the next successful industry.
 
Pros and cons
 
Indeed, during periods of increasing uncertainty, large companies tend to reduce staff and freeze recruitment to control costs, but this sometimes results in a shortage of mission-critical employees. As a result, many new or former employees will instead seek to sign odd jobs agreements with new or former employers to complete these projects. It is this "work odd" model that makes companies such as Upwork and Uber so successful. This model also reduces the risk of the platform's own operating costs by turning employers into contractors, making the relationship between the two parties more flexible.
Individuals or small entrepreneurial teams can often use this to go back to the organization where they worked and continue to work that they are already very good at, and they can earn higher project income, while also looking for similar jobs and opportunities elsewhere.
Economic volatility also brings more opportunities. As soon as there is pain, there will be a need for solving the pain, so the opportunities will increase, and new startups will have the opportunity to solve the real existence in real life. The problem. For example, under the impact of the epidemic, more and more consumers will be more accustomed to online shopping and consumption; institutions and enterprises in the medical industry and education industry have therefore seen new opportunities for market growth. Companies such as these are likely to become new industry leaders and prepare for the "next big problem."
The biggest downside risk of starting a business during this period is that it is likely that the budget expected by entrepreneurs no longer exists. This lack of budget due to austerity is one of the definitions of periods of economic volatility.
This is a problem for a startup that seeks self-funded organic growth from customers or customer income, or a company that uses its promising new concepts to seek venture capital support. As budgets tighten, companies are unlikely to invest in products and services where they cannot see immediate value. Moreover, when the founder of a startup company seeks financing, the business model of the project itself will be subject to stricter inspection, and only the best can stand out.
 
The biggest problem for startups is not a lack of funds, but a lack of time.
Again, even in the best economic environment, it is extremely difficult to establish a brand new company. It does reduce the likelihood of success during periods of economic volatility, but it does not mean that it is impossible, it just means that you need sharper judgment and stronger fighting spirit.
 
How to grow quickly?
1. Simplify communication
Well-known startups like GitLab, InVision, Zapier have chosen to establish remote teams first. From 2005 to 2012, the number of people working remotely in the United States increased by nearly 80%. And this number continues to grow. However, for distributed teams to succeed, you must simplify communication.
This includes simplifying internal communication with team members and external communication with customers, suppliers, and shareholders. Enterprises that do not use reliable communication plans and tools to streamline communication are difficult to grow and expand.
2. Reduce waste of resources
Many large enterprises have made the common mistake of wasting resources. It is mainly a waste of time, money, tools, and even talents. Reasonable resource allocation is a common challenge facing many enterprises today.
In addition, many companies purchase software or subscribe to the latest and most dazzling platforms or tools, only to find that communication and processes are not only simplified but more complicated. Many companies do not make full use of these tools, and ultimately only waste a lot of money. Remember, the tools and platform are designed to help support your existing workflow, not to change the existing workflow to adapt to this tool.
3. Build agile culture
Today, many companies, large and small, are aware of the benefits of organizational agility. Facts have proved that building an agile organizational culture can help improve collaboration, encourage design thinking, and stimulate innovation.
Building an agile culture requires innovative technology and practice. Setting specific standards can encourage and support mutual collaboration, the generation of new ideas, creative thinking and problem-solving skills, an adaptable working style and a flexible working environment.
4. Break the functional silos
Functional silos are a by-product of a work model that is far from meeting current business needs. The isolated work structure brings many risks to the company, including increasing workload, reducing productivity, and even causing duplicate work.
Cultivating a collaborative work environment can help ensure that all team members know what others are doing, help companies complete tasks and projects faster, and thus further develop, or even accelerate the decision-making process.
5. Use Automation
For enterprises, time is also a limited resource. Therefore, any technique or tool that can simplify performing tasks will help to minimize waste of resources. A survey shows that 32% of executives believe that choosing the right technology is critical to future success and growth. In addition, 49% of executives believe that in the next three to five years, investment in technology and embracing digital transformation are areas that should be focused on.
The best way to achieve this is to realize automation and digital transformation, or use artificial intelligence. For example, some specific tasks and projects can be operated with artificial intelligence. It only takes a few minutes to set up automation to simplify certain tasks, and you can save hours of time.