Rising inflation is causing global markets to experience significant declines. That means an economic slowdown is coming, which could lead to a recession.
Although the term “recession” can feel scary, it’s also important to consider personal circumstances and local needs. Entrepreneurs first started some of the biggest and best companies ever built during slow economic periods.
Could now be the right time to start a construction business?
Why Do People Start Businesses During a Recession?
The primary reason why bold entrepreneurs start businesses during recessionary times is for job security. If you control your circumstances, you don’t need to rely on another company for a paycheck.
- Bill Gates and Paul Allen founded Microsoft during the oil embargo recession in 1975.
- iRobot started during the recession in the early 1990s when restrictive monetary policies were used to stop inflation.
- Two former Yahoo employees started WhatsApp in 2009, with five former colleagues investing a total of $250,000.
Construction companies follow a similar pattern of success when launched during a recession. Even during an economic downturn, the principle of supply and demand applies. If you can find a niche your community wants to be met, there could be lucrative opportunities to explore.
A recession automatically creates less competition. When you can provide specific expertise that isn’t available in your community, your construction business could be the only one providing that service.
Recession-Proof Your Income with a New Business Idea
The past 12 months have seen numerous building and renovation opportunities in the industry. Even the high prices and product shortages for lumber, concrete, and other materials didn’t stop the need for new construction.
When starting a business during a recession, the goal should be finding the service type your community wants. It could involve foundation waterproofing, plumbing repair, or a handyman company that does a little bit of everything.
Industries that provide essential services, including maintenance and repair, are often recession-proof. If your construction business primarily builds new homes, you could continue increasing revenues by pivoting to roof repair and installation, window installs, and similar needs.
How to Maximize Your Initial Investment
Since budgets can be tight during a recession, letting your initial investment do as much work as possible for the least amount of money is essential.
Construction businesses have mandatory tools that must be available to complete most projects. After buying these items, consider renting the machines you need for one-off projects at the beginning to save some money.
A new business must establish itself in its community to ensure people know it exists. Marketing investments in branding, website development, lawn signs, business cards, and Google Ads often pay for themselves with the first few clients you sign.
Magneta Marketing can help you launch or grow your construction business by creating an effective online presence that communicates your expertise to consumers. You’ve got clients waiting for what you do out there. We’ll help you find them!