Is it sensible to start a business in an economic crisis?
It’s a timely question. And as part of our series exploring the process from start-up to success, that’s what we’re looking at today. There’s no shortage of bad news in the current economy. Growth is slow, inflation is high, and recession remains a real possibility.
So, should you hold off on that start-up? Well, no. Not necessarily anyway. Today, we’re explaining why – and we have a personal reason for our positive message!
When Hexa started
We started Hexa during lockdown in 2020. The economy was in a bad way, just like now. And in lockdown, there wasn’t any scope for in-person meetings. But we saw a path for an agile business finance provider.
At the time, there was a lot of funding available, and businesses (especially SMEs) needed support in navigating such a stressful period. We were able to provide it. This helped our customers to overcome those challenges, and enabled us to grow Hexa into what it is today. There’s a lesson in this …
… Your business is not the economy
The economy overall may be in trouble, but here’s the crucial point: your business can still succeed, just like we did in lockdown.
Timing is important, but many other factors affect how you’ll perform in a downturn. Your sector makes a difference. So do your business plan, your approach, your ideas, your team and your personality!
It’s important to be cautious of course, and we should all pay attention to the broader economy. But if foundations are right, it’s possible to succeed. And in fact, the pandemic proves it.
Startup business facts – the pandemic
During the pandemic, a whole load of economic activity shut down. You might think the outlook for start-ups was dire. But in spite of the extreme challenges we all faced, there were still success stories.
In 2020 and 2021:
- In the UK, almost 726,000 new businesses were created compared to 636,000 in 2019.
- Online retail start-ups more than doubled.
- There was a significant increase in consumer businesses, start-ups in retail and wholesale grew 60.5% year on year.
- In 2021, 810,316 new businesses were started, the highest ever on record.
Some of these reflect changing patterns of consumption. For instance, online retail was always going to grow when people couldn’t go out to shop. The challenge is recognising the opportunity and taking it.
Final thoughts
We’d never make light of the difficult times we’ve all faced in the last few years. Many people and businesses are struggling through no fault of their own, and we’d all love to see some light at the end of the tunnel.
The point is that even in difficult times, people can find a way. Why? Because we’re creative, resourceful problem-solvers. Entrepreneurs should embrace that spirit.
At Hexa, we love helping businesses overcome challenges and grow. If you’re wondering about how to face the uncertainties ahead, we’d love to help.