What a Recession Means for the Student Entrepreneur
The simple rule of putting your eggs in different baskets will echo throughout this article. The ability to learn from one’s environment, one’s own mistakes, and the faults other’s display will be essential in the midst of a crisis.
For a student entrepreneur, he or she may feel the recession even before it officially starts usually because a recession is preceded by a number of events, including slowed growth.
The United States is said to be approaching its first recession in nearly 6 decades and there are many points to remember when you find yourself in a situation where the economy is actually correcting itself.
The stock market drops. The adage “buy low and sell high” is never clearer than it is here. Good stocks get dragged down just like bad stocks and this provides anybody with the opportunity to take advantage of the point drop. The points will go up eventually, albeit slowly and unpredictably; but recessions after World War II never lasted for more than a year.
Since everything goes down, one can take advantage of decreasing cost by hiring or paying one’s suppliers at a lower cost.
For your part, recession also gives you the opportunity to sharpen your knife. You have the opportunity to hone your service or quality and you won’t have to necessarily cut your price if you have improved both. Competition for you increases and the opportunity cost of starting businesses go down.
Demand for everything doesn’t necessarily go down during a recession. You are in a position to profit. Students like yourself can handle costs more easily, especially if you run your business from home, use the internet to do so, and do not necessarily hire people. The world is your market and tools to harness is are readily available to you.
Recessions may indeed decrease your wealth and even the most experienced businessman can be humbled by it. This is also the chance to test your mettle: to expand your customer base, to look for new and exciting ways to market your product, to find new avenues of supply, and to take advantage of what other people may consider hindrances.
Related Articles:
- Do Online Business Owners Feel the Recession?
- Why it is Easier to be a Student Entrepreneur
- Five time-wasters for the college entrepreneur
- Dropping out of college for your biz? Here are some things you should consider
- Why I Didn’t Use Credit Cards In College
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I feel like a broken record touting this all the time, but Timothy Ferriss’ book The Four Hour Work Week is perfect for this example.
Any student whose business is taking off, instead of hiring employees and dealing with payroll, hire a virtual assistant from GetFriday.com or a similar company.
This will teach you the management skills for when you later do need full time employees and can afford it, and it will also save you a bundle of cash as everything you pay them is tax deductible as a business expense AND they work ON DEMAND, which means you’re not paying someone to sit and look at Facebook all day.
On a personal note, I have been enjoying your blog over the past few days I’ve been watching it, and was hoping that I might be able to use some of your content when I put on seminars for college students about starting their own companies from their dorm room. If you would email me at eb at ellisbenus.com I would relish the opportunity to speak with you.