The UK is headed for recession – a recession that could be long and severe. Typically, recessions are accompanied by corporate layoffs and job losses, with leaders themselves at risk of being suddenly out of a job.
In this situation many leaders will choose to regroup, dust off their resumes and apply for other jobs. Some, however, will see redundancy as an opportunity to change their lives and possibly start their own businesses.
So, what should leaders know about starting a business in a recession? US-based business and strategy coach Ellie Diop, founder of Ellie Talks Money, It is in a good position to present some pointers.
After losing her corporate job during the pandemic, she used her $1,200 stimulus check to build a multi-million dollar online coaching business in just one year. Today his online academy, Elevated Academy, serves over 50,000 students and Diop is committed to helping other people overcome their circumstances to build their own successful businesses.
Here are his four tried and tested strategies for success:
Strategy 1: Keep your startup costs low
“Choose a business that will allow you to keep your startup costs as low as possible,” says Diop. “When I launched my business, Ally Talks Money, I bought a ring light, an upgraded iPhone, a website domain and a Canva Pro membership.”
She adds: “All in all, it cost me less than $600. I shared free educational content on Instagram and spent another $600 over a few months promoting my content on other social media pages.
If you’re thinking of starting a low-cost e-commerce business, Diop’s advice is to first identify the product you want to sell. Use the TikTok #MadeMeBuyIt hashtag and discover the most liked videos and the top five products trending online in the last three months. You can then create a Shopify account. This step will connect you directly to suppliers like Alibaba and AliExpress, which will allow you to manufacture products without purchasing inventory upfront (known as “dropshipping”).
You can create low-cost products, list them on your Shopify store and charge a mark-up to sell to your customers. After placing the order, your customers will receive the product directly from the supplier.
Another option recommended by Diop—one that will be favored by many leaders—is to start a consulting business. Identify a niche or potential topics to cover using platforms such as Instagram or Linkedin. These platforms will help you find clients who need help in your area of expertise. You can then highlight your skills and achievements to your potential clients, so they understand the value you bring.
Diop also suggests starting a low-cost business based on digital products. Some digital products that can be sold include printables (digital downloads), workbooks, templates, recipes, courses, e-books, and subscriptions.
Strategy 2: Build community through content creation
“Short content videos of 60 seconds or less can help build a community on platforms like Instagram and TikTok,” advises Diop. “You can use those videos to educate your audience about a particular topic or industry, while also entertaining and inspiring them.”
To build a following, aim to release three to four pieces of short-form content per day. When you follow this process, you’ll know what’s working by seeing your audience’s engagement through the likes, comments and direct messages your posts generate.
An important strategy to increase growth is to encourage people to leave comments or direct messages. “It’s also helpful to provide your audience with a free offer that will send them to your email list so you can continue to engage with them there,” adds Diop.
Strategy 3: Build trust by delivering quality
“Putting your client first and getting results for your client should be your top priority,” says Diop. “So, consider things like the quality of your offerings and how efficiently your customers will be able to access your services or products. It’s important to create an accessible brand while anticipating and responding to their questions.
Diop uses the Thinkific platform to elevate the quality of its clients’ learning experiences. He has found that Thinkific Communities (an online learning environment that enables educators to interact directly with their audience) has allowed him to connect with his community in a seamless way. This gives his customers easy access to his products.
Strategy 4: Strategically manage your expenses to qualify for funding
Lack of access to capital is a major reason why most businesses fail within the first five years. “Creating a strategy that will give you access to capital from the early days of your business,” says Diop. “While funding may not be needed to start, it will need to scale.”
Access to business credit, grants, and loans is essential when you’re expanding your team, adding new products and services, and developing new marketing strategies. “In order to qualify for those funding opportunities, it’s important to keep your business expenses very organized,” recommends Diop. “Some important things you should implement early on include opening a business account, keeping good financial records, and separating personal funds from business funds. You want to manage your expenses to make sure you have a Run a cash-flow-positive business.”