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The cost of living crisis has affected many over the past year, and common sense says to put plans of starting your own business on hold until the financial storm passes.

Despite this, Companies House saw an increase of newly incorporated businesses over the past year by 19% compared to the last 5 years. Why is this? Well, launching a business isn’t necessarily dependent on the economy being in full swing.

Popular companies such as Microsoft, Disney and more recently Uber and Airbnb all launched during recessions and JD Sports and Pure Gym both started and thrived through economic uncertainty.

The reason for this is that a struggling economy breeds gaps in the market and shifts in consumer spending.

In this blog, we outline 10 reasons why launching a business during the cost of living crisis is not all doom and gloom.

Businesses struggling to continue

Bigger, more established companies tend to have cash reserves, but are often cautious and even slower to react, leaving them in a challenging situation when consumer spending changes.

Start ups are typically more nimble and don’t have expensive overheads that are affected during a financial crisis. Allowing them to operate in a lean approach through their launch, finding new ways to work by being more flexible.

Increased support for start ups

Throughout financial difficult, there is typically an increase in schemes, grants and incentives to support the early growth of small business, this is because they are often viewed as a key to kick start the economy.

Easier ways to securing investment

If interest rate lower, investors often look to other avenues for investing their money and may be interested in funding your business.

You can source better staff

Many people unfortunately face loosing their jobs during financial difficulties as established companies go bust. This typically leads to an influx of talent in the job market with fewer jobs available for them, meaning your start up may be more appealing to those looking for work.

Less competition

Unlike you, many decide not to launch during financial difficult, clearing the way for your business to thrive, additionally many established businesses that are unable to pivot may go out of business allowing yours to rise up in its place.

Negotiating deals

Suppliers can often be hit the hardest when consumer spending dries up or businesses go under. Suppliers will often have huge quantities of stock that needs shifting putting you in a better position to negotiation deals and significant discounts when buying in bulk.

Providing cost effective solutions

Consumer spending changes during financial difficulty. Customers are search for good quality products and services that are cheaper. With minimal overheads, start ups are well placed to offer cost saving solutions.

If you’re thinking about launching a business during the cost of living crisis, Otters Design can support you to get your brand off the mark, Contact us about our branding design services today.