Starting a business is a nerve-wracking and daunting venture at the best of times, but especially during an economic downturn.
If you’re interested in starting a business as the UK faces economic decline and the cost of living rises, it’s hard to imagine a business growing let alone being founded during this period.
However, every economic change offers opportunities and often gives rise to what becomes rapidly growing start-ups. This is our list of the five businesses to start during the economic downturn.
5 businesses to start in an economic downturn include:
- Cyber security and tech support
- Discount retailers
One of the best businesses to start during an economic downturn is a grocery store or grocery delivery. This simply comes down to the fact that everyone needs groceries, regardless of the state of the economy.
The average UK household spends around ‘£3,601 on groceries and £1,744 on food at restaurants and takeaways every year’, meaning that there is plenty of opportunity in the sector despite the high competition.
In addition to this, during a financially difficult time, people tend to cut back on unnecessary expenses such as eating out in restaurants and therefore relying more on grocery stores than they typically would.
As a result, starting a business that sells groceries is a good idea during the economic downturn when the demand is higher, especially if you can compete with local supermarkets by offering food for cheaper prices.
2. Cyber Security & Tech Support
Another business to consider starting in a phase of economic decline is a cyber security and tech support business.
Since the pandemic, people have been working, shopping, streaming programs and communicating online more than ever before.
In fact, today, there are as many as ‘5.03 billion internet users in the world. With the increase in the amount of time we spend online, paired with the sheer amount of people that require cyber security to ensure their safety online, the demand for these businesses is evident.
Bearing this in mind, starting a reliable, yet affordable cybersecurity business that offers high-quality tech support is a great idea during an uncertain time such as during an economic downturn.
When you consider that larger cyber security companies tend to be more expensive, provided you can offer a competitive price for your product during a difficult time, you’re sure to generate interest in your business.
Another ideal business to start during an economic decline is one that deals with repairs, as things are always in need of being fixed.
In addition to this, during a time of making cuts, people are bound to be repairing what they’ve already got and making do as opposed to spending unnecessary money on something brand new.
In fact, with ‘over a third of people’ having to cut their spending due to the rising cost of living, there has been an ‘increase in the number of people repairing goods’.
In addition to this, as the world tries to limit the amount of waste it produces in a bid to make it more sustainable due to the effects of climate change, the demand for repairing products to reduce your impact on the environment will only increase.
As a result, starting a business that specializes in repairs is likely to succeed during economic decline where people are trying to spend less.
4. Pet Industry
Another business to start in an economic downturn is one in the pet industry. As a country, the UK is surprisingly big on pets, so the demand for pet products is already very high.
In fact, 59% of households in the UK own pets, with 33% of households owning dogs and 27% owning cats.
With the demand for these businesses having risen thanks to the 3.2 million pets acquired during lockdown in the UK alone, starting a business that specializes in pet products is a good idea during economic decline whether you decide to opt for an e-commerce business or a physical store.
Websites such as Ahoof, an e-commerce business that sells pet products, are the perfect example of this.
Being able to provide for the countries’ furry companion by starting a pet business (or pet blogging) is therefore a solid choice.
5. Discount Retailers
Lastly, a discount retailer is a reliable business to start during an economic downturn.
People are always looking for a better deal, especially during times of hardship when they’re having to tighten the purse strings. In fact, studies have shown that offering a discount has the potential to ‘dissuade consumers from searching for the same product elsewhere’.
Discount retailers owe part of their success to the fact that discounts can help to create a sense of urgency in consumers, therefore encouraging them to buy a product while the discount is still available.
As people will begin to associate your business with the best deal they’re going to find during a tricky time where funds are limited, you’ll begin to gain authority with your target market.
As a result of this, more and more people will come to you for the best-discounted prices, and you’ll be able to capitalize on sales as a result of this.
Written by Jemima Thomas on behalf of Tramshed Tech, the home of start-ups in Wales.