Every cloud has a silver lining. They say that while the recession ruins some people it also provides opportunities for others. And according to experts this is the best time to set up a new business.
Intrigued by this unusual take on the recession, Emirates Business spoke to Waqar Mirza, Director and Partner, KF1 Management Consultants, to find out why the time is apt to set up a new business and came up with 10 reasons.
1. Bargains everywhere: In a recession, you are in a position where you can demand bargains because people who have products and services are desperate to sell. So if you are in a position to buy you can dictate terms. Also these days people want cash and not cheques. So if you offer cash you have more bargaining power to buy things cheap. Now also there are fabulous offers and bargains. Suppliers who you want to buy your goods and services from are now more flexible.
2. Man power at cheap prices: Due to the recession, a large talent pool has been made redundant. Earlier, you could not dream of hiring these people and their services because they would have cost you a packet, but now you can afford to hire them as good talent is available at cheaper prices. If you hire good talent you have a better chance to see success.
3. Out with the old, in with the new: Earlier companies had strong bonds with their suppliers. Now due to the crisis, they are looking for more flexible, nimble suppliers. So this is a good business opportunity for lean and mean suppliers and new businesses can take advantage of that.
4. Friend in need: People still have cash but they do not want to invest in banks, properties and stocks, basically the traditional investment avenues. So they have surplus cash lying around with nowhere to invest. So if you have a good relationship with someone who has the money to invest, and you have a brilliant idea for a business it is more likely that they will be more open to investing in your business now than earlier. Banks are also offering a facility called invoice factoring. They take your invoice and pay you instantly. Also, you can leverage your property to get money from the banks. In addition, you may have assets that may have gone up over the years, like gold for example. You can sell it off to provide you the much-needed money to set up your business. If you have a large office you can also sublet it in order to raise some money for your business. Also the government and other organisations always give grants to encourage people in different fields. So set up a business for which grants are available. You just need to be a bit more creative in order to raise that money right now and it can be done.
5. Distress sales: In the good days, many businesses overstretched their resources and spending. But they could afford it till the going was good but now the margins have come down. Many people are desperate to get rid of the business, as they are not used to performing in a downturn and now want to cut their losses. So you do not have to start a new business, you can buy an established business at a cheap price.
6. No option: For many people setting up a business has become imperative now as they have no other option. These are the very people who would not have thought of setting up a business because they had good, well-paying, and satisfying jobs and there was no need for them to think in terms of striking out on their own. Now these very people have lost jobs, there are no jobs available in the market and they cannot afford to wait for another job to come around. Also, as now the security blanket has been taken away, and there are no other options available so why not go to work for yourself?
7. Like-minded people: Not everyone is cut out to set up a business. You may have the expertise and knowhow required to do a certain job but you may not have the acumen to do the business. For example you may be a good chef but you might not know how to run a restaurant. So you can now search for people who can team up with you to help you set up the business and run it. Whereas earlier they would have been hard to find, now due to redundancies galore, you will find it easier to find this kind of talent and you can get together with them and set up a business. Also bartering is quite big right now. For example, if you are a marketing guy who wants accounting services but do not want to spend that kind of money in the initial stages of setting up the business, then you can barter with the accounting service. You can do their marketing for them for a year and in return they can provide you with accounting services. Outsourcing is also a good way of getting what you want without having to spend a packet on it. For example, you need a lot of IT support these days for setting up and running your business. There are companies in the market who will provide you the services.
8. Niche market opportunities: Earlier, the UAE was geared up towards providing high value services. All focus was on luxury and high-end items and services. Now due to the crisis, low value services are in demand as people are holding on to their money. So if you set up a business were you can provide cheaper services you can do well as now there is a market for it that is huge.
9. Lots of public relations: The media is fed up of publishing bad news. Everyone is looking for some good news. If you come up with a brilliant and interesting business concept right now you are sure to get their interest, as they are more open to this kind of news right now. So you could land up getting a lot of positive coverage that is key to the success of a business.
10. Easier to set up business: Due to the recession it has become easier to set up the business as local sponsors have become more flexible and amenable than ever before and are open to working with you more closely in order to make the business a success for check out the latest business 24 news.