Britain is headed for a recession – a recession that could be long and deep. Typically, recessions are accompanied by corporate cutbacks and job losses, with executives at risk of sudden unemployment.
Many leaders in this situation will choose to regroup, dust off their resumes, and apply for other jobs. However, some will see the layoff as an opportunity to change their lives and potentially 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, is in a great position to provide some pointers.
After losing her corporate job during the pandemic, she used her $1,200 stimulus check to grow a multimillion-dollar online coaching business in just one year. Today, her online academy, Ellievated Academy, serves over 50,000 students, and Diop is committed to helping other people overcome their circumstances and build their own successful businesses.
These are her four proven strategies for success:
strategy 1: Keep your start-up costs low
“Choose a store that allows you to keep your initial outlay as low as possible,” says Diop. “When I started my business, Ellie Talks Money, I bought a ring light, an improved iPhone, a website domain, and a Canva Pro membership.”
She continues, “All in all, it cost me less than $600. I shared educational content on Instagram for free and spent another $600 over a few months promoting my content on other social media sites.”
If you’re thinking of starting a low-cost e-commerce business, Diop recommends first identifying the product you want to sell. Use the TikTok hashtag #MadeMeBuyIt and research the most popular videos and 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, allowing you to create a product without purchasing inventory upfront (which is known as “dropshipping”).
You can create low-cost products, list them on your Shopify store, and charge a markup to sell them to your customers. Your customers receive the product directly from the supplier after ordering.
Another option recommended by Diop and favored by many executives is to start a consulting firm. Identify a niche or potential topics to cover via platforms like Instagram or Linkedin. These platforms will also help you find clients who need support in your area of expertise. You can then highlight your skills and accomplishments to your prospects so they understand the value you can bring.
Diop also suggests starting a low-cost business based on digital products. Some of the digital products that may be sold include hard copies (digital downloads), workbooks, templates, recipes, courses, eBooks, and subscriptions.
Strategy 2: Building a community through content creation
“Short-form content videos of 60 seconds or less can help build a community on platforms like Instagram and TikTok,” advises Diop. “You can use these videos to educate your audience about a specific topic or industry while entertaining and inspiring them at the same time.”
To build a following, you should aim to post three to four short pieces of content per day. If you follow this process, you’ll know what’s working by observing your audience’s engagement through the likes, comments, and direct messages your posts generate.
A key strategy to increase growth is to encourage people to leave comments or direct messages. “It also helps to give your audience a free offer that sends them onto your email list so you can keep connecting with them there,” adds Diop.
Strategy 3: Increase trust by delivering quality
“Putting your customer first and getting results for your customers should be your top priority,” says Diop. “So consider things like the quality of your offerings and how efficiently your customers can access your service or product. Building an accessible brand while anticipating and responding to their questions is key.”
Diop uses the Thinkific platform to improve the quality of their clients’ learning experiences. She has found that Thinkific Communities (an online learning environment that allows educators to interact directly with their audience) has allowed her to connect with her community in a streamlined way. It also offers their customers easy access to their products.
Strategy 4: Strategically manage your spending to qualify for funding
Lack of access to capital is one of the main reasons why most businesses fail within the first five years. “Building a strategy that gives you access to capital from the start is critical,” says Diop. “While funding may not be a requirement to launch, it will be needed to scale.”
As you expand your team, add new products and services, and develop new marketing strategies, it’s important to have access to business credit, grants, and loans. “To qualify for these funding opportunities, it’s important to keep your business expenses extremely organized,” Diop recommends. “Some of the key things to do early on are opening a business account, maintaining good financial records, and separating personal and business funds. You also want to manage your expenses to ensure you are running a cash flow positive business.”