Is it possible to start a business during a recession?
We answer the top five questions asked by graduates considering starting a business during the pandemic
Perhaps you’ve got a great idea you want to share with the world, or you’ve got a particular skill that you think could benefit others — whatever your angle, if you’re reading this blog, chances are you’re considering becoming your own boss, either as a freelancer, sole trader or setting up a limited company.
But naturally, taking the leap into self-employment can be a bit daunting, and that’s without the added pressure of a global pandemic. But your stakes might be far higher than you think!
We caught up with Business Start-Up and Entrepreneurial Development Manager, Mohammed Ali (who has been supporting young entrepreneurs for several years), where he answered the top five questions on a graduate's mind when considering self-employment during COVID-19.
Don’t forget, it’s global entrepreneurship week in November, and we’re running lots of events and activities that you can get involved with which have been designed to support students and graduates considering self-employment.
What has been the driving force behind other graduates starting a business?
For most, it’s because they’d like to do something beyond their job. It may be because they’ve grown skills/relationships that they can grow into a business, either alone or with others.
For others, it might be because they hate their job — let’s be honest, some jobs have the ability to make us truly miserable but this can spur you on to look at alternative options — cue self-employment.
“Many a great thing has been achieved by having a chip on your shoulder .”
Many may be struggling to find a job or have their heart set on being their own boss anyway — consequently creating their own opportunities.
There are many driving forces behind taking the leap into self-employment and you can read our student and graduate stories over in our Start-Up Directory for some inspo….
Can my business survive during a recession?
Some of the biggest companies out there today were created during the last recession. The landscape may be different, but all you need is a customer (and it usually grows from there).
To be honest, any time is a good time to start a business, but sometimes recessions can just make people more focussed.
The good news for our students and graduates is, we offer so much support to help get them started. Such as how-to workshops, events, competitions, advice, funding to cover your start-up costs and more.
Confused about the formalities of self-employment? Join our freelance quickstart on the 17th November and Mohammed will cover tax and legal considerations in an easy to understand way.
Should I quit my job to start my business?
Don’t quit a job on a whim to throw yourself into a business idea — for most, the inspirational pump is very quickly over and you will be faced with making bad decisions because you have to worry about bills all the time.
Instead, try this;
1
Calculate your absolute minimum monthly living expense (that does not include Netflix or any other nice to haves). Whatever you think this figure is, cut it even further, and then you’ll know if you can survive without it temporarily.
2
Work in your job 9–5 and on your start-up 5–9. In other words, go double-time. Be it a couple of hours in the morning, during your lunch break, evening, or weekends.
3
Once the income from your 5 to 9 start-up meets your minimum monthly living expense, then make the jump into your business full-time. As your basic costs are covered, you can spend more headspace on growing the business, for which you already have momentum.
4
As a bonus, if you can save some money whilst working in your main job, you will build a great ‘rainy day pot’ and can use that to build your business quicker.
You can be employed by a company and be self-employed at the same time, just make sure you check your employment contract in case your employer asks you to let them know, and obviously don’t use your employer time/resources on your start-up.
How much does it cost to set up a business?
Not very much — registration of a limited company is £12 and free for a sole trader. After that, it can be as little or as much as you want.
There are so many free resources out there — check out the Start-Up stash for a good list and don’t fall into the vanity trap of spending lots of money on fancy websites and logos unless your business calls for it.
Don’t forget you can get funding support up to £500 via our start-up fund.
I want to start a business, but don’t have an idea — what next?
Be a trend-spotter — look and you will notice things around you. See what people want to achieve or solve and when. Once you’ve spotted a gap, act on it!
You could deliver the idea yourself, or find people to deliver it for you and then focus on reaching the customer (e.g. you do the graphic design for businesses or you find a designer to work with you whilst you find the clients).
Try something fun — use google trends to discover what the world is searching for near the area you want to work.
Another option is to look at your own skillset and consider who can benefit from it and how you can make it commercially attractive. Perhaps you’re fluent in different languages and you can share that skill with businesses in your local area. Google what other’s are doing to see how you can commercialise it!
WARNING
Whatever you do, make sure you avoid the ‘get rich quick’ click-bait articles — search ‘contrepreneur’ and find out more about their appaling tactics.
The B-Enterprising team is running an action-packed programme of support and funding during November to help students and graduates — find out more on their homepage or contact benterprising@contacts.bham.ac.uk.
