Read time: 3m read
Many budding entrepreneurs will have spent the past two years waiting for the coronavirus pandemic to fade before starting their business.
But with rising inflation contributing to the cost-of-living crisis and threatening to cause a recession, it might feel like it’s worth holding on a bit longer. Read on for what you need to learn before launching a business and how you can beat the odds to prosper in these challenging times.
Is it wise to start a business now?
The economic conditions are certainly tricky. In June, the Bank of England raised interest rates to 1.25%, its fifth consecutive increase,1 and said inflation was expected to reach 11% in the autumn.2 With such uncertainty, starting a business might seem like a big risk, especially if you’re working in a stable corporate job.
Yet the truth is, there are always excuses to put off getting started. Entrepreneurs with vision and dedication stand a good chance of succeeding regardless of the economic climate – and it might even open up some possibilities.
“Every month, we seem to have new challenges,” says Jonathan Williams, who in 2020 founded Briefly, an app that provides press releases written by sector-relevant journalists. “There are still issues around finding and hiring technical recruits such as developers, and we also face financial obstacles in the form of inflation and rising interest rates.
“But we feel that as a business-to-business brand, there are opportunities in these challenges. We are creating something that offers businesses a more affordable, hopefully better service than they were able to get before. This means that in the current economy, it’s even easier for potential customers to make the decision to move to our platform, as they are saving money and improving results.”
How does inflation affect a new business?
Inflation causes enormous problems for businesses and consumers, who struggle to cope with the rising prices and often choose to cut back on spending as a result.
There are ways to protect your business from inflation, such as increasing your prices, but that risks losing customers who are likely to be sensitive to this, given the current economic environment. Alternatively, you could absorb the price rises yourself, although this will reduce profit margins.
Deepak Shukla, owner of the Pearl Lemon Café brand, recently opened a new shop in London. He explains he's beating inflation by “trying to cut costs and increase prices where that makes sense, while focusing on giving people a great customer experience.”
He continues: "There has been a rise in costs that shows up in higher utility bills and business expenses, which affect business owners who rent their spaces. For a café, there’s a significant electrical usage, so there are high energy costs associated with that.
“Those high operating costs are a big challenge, but there are opportunities in opening up a business post-pandemic. People want to go out more, connect with others and participate in the economy more because restrictions have been lifted.”
Other entrepreneurs are able to absorb some of the rising costs. “We definitely see prices of certain things rising,” says Jonathan. “We’re paying more for some services, but we’re currently able to swallow some of these costs into our subscriptions, which offer great value to users each month anyway.”
How can you be successful in a recession?
While we’re not yet officially in recession, it’s a close-run thing. So is it possible to weather the storm? It might seem counterintuitive, but many of the most successful businesses of recent years have launched during periods of economic turmoil. That includes big companies such as WhatsApp, GroupOn and Uber, all of which were founded in the aftermath of the 2008 financial crash.
Particularly in the wake of the pandemic, consumers are looking to spend money with small, independent companies, which can work in your favour as you start your business journey.
“People are more eager to support independent businesses during this time,” confirms Deepak. “It feels like something that they can really get behind.”
So, is this the best time to start a new business? In reality, launching your own company will always be a risk, but as long as you have a plan, take advice from experts and believe in your idea, you have a good chance of success.
Talk to us
If you’re planning on starting a business, it’s important your own finances are also in order. Contact us for advice – we often work alongside business-growth advisers to make sure that both your business and your personal finances are holistically supporting your goals.
Read time: 3m read
Many budding entrepreneurs will have spent the past two years waiting for the coronavirus pandemic to fade before starting their business.
But with rising inflation contributing to the cost-of-living crisis and threatening to cause a recession, it might feel like it’s worth holding on a bit longer. Read on for what you need to learn before launching a business and how you can beat the odds to prosper in these challenging times.
Is it wise to start a business now?
The economic conditions are certainly tricky. In June, the Bank of England raised interest rates to 1.25%, its fifth consecutive increase,1 and said inflation was expected to reach 11% in the autumn.2 With such uncertainty, starting a business might seem like a big risk, especially if you’re working in a stable corporate job.
Yet the truth is, there are always excuses to put off getting started. Entrepreneurs with vision and dedication stand a good chance of succeeding regardless of the economic climate – and it might even open up some possibilities.
“Every month, we seem to have new challenges,” says Jonathan Williams, who in 2020 founded Briefly, an app that provides press releases written by sector-relevant journalists. “There are still issues around finding and hiring technical recruits such as developers, and we also face financial obstacles in the form of inflation and rising interest rates.
“But we feel that as a business-to-business brand, there are opportunities in these challenges. We are creating something that offers businesses a more affordable, hopefully better service than they were able to get before. This means that in the current economy, it’s even easier for potential customers to make the decision to move to our platform, as they are saving money and improving results.”
How does inflation affect a new business?
Inflation causes enormous problems for businesses and consumers, who struggle to cope with the rising prices and often choose to cut back on spending as a result.
There are ways to protect your business from inflation, such as increasing your prices, but that risks losing customers who are likely to be sensitive to this, given the current economic environment. Alternatively, you could absorb the price rises yourself, although this will reduce profit margins.
Deepak Shukla, owner of the Pearl Lemon Café brand, recently opened a new shop in London. He explains he's beating inflation by “trying to cut costs and increase prices where that makes sense, while focusing on giving people a great customer experience.”
He continues: "There has been a rise in costs that shows up in higher utility bills and business expenses, which affect business owners who rent their spaces. For a café, there’s a significant electrical usage, so there are high energy costs associated with that.
“Those high operating costs are a big challenge, but there are opportunities in opening up a business post-pandemic. People want to go out more, connect with others and participate in the economy more because restrictions have been lifted.”
Other entrepreneurs are able to absorb some of the rising costs. “We definitely see prices of certain things rising,” says Jonathan. “We’re paying more for some services, but we’re currently able to swallow some of these costs into our subscriptions, which offer great value to users each month anyway.”
How can you be successful in a recession?
While we’re not yet officially in recession, it’s a close-run thing. So is it possible to weather the storm? It might seem counterintuitive, but many of the most successful businesses of recent years have launched during periods of economic turmoil. That includes big companies such as WhatsApp, GroupOn and Uber, all of which were founded in the aftermath of the 2008 financial crash.
Particularly in the wake of the pandemic, consumers are looking to spend money with small, independent companies, which can work in your favour as you start your business journey.
“People are more eager to support independent businesses during this time,” confirms Deepak. “It feels like something that they can really get behind.”
So, is this the best time to start a new business? In reality, launching your own company will always be a risk, but as long as you have a plan, take advice from experts and believe in your idea, you have a good chance of success.
Talk to us
If you’re planning on starting a business, it’s important your own finances are also in order. Contact us for advice – we often work alongside business-growth advisers to make sure that both your business and your personal finances are holistically supporting your goals.
Read time: 3m read
Many budding entrepreneurs will have spent the past two years waiting for the coronavirus pandemic to fade before starting their business.
But with rising inflation contributing to the cost-of-living crisis and threatening to cause a recession, it might feel like it’s worth holding on a bit longer. Read on for what you need to learn before launching a business and how you can beat the odds to prosper in these challenging times.
Is it wise to start a business now?
The economic conditions are certainly tricky. In June, the Bank of England raised interest rates to 1.25%, its fifth consecutive increase,1 and said inflation was expected to reach 11% in the autumn.2 With such uncertainty, starting a business might seem like a big risk, especially if you’re working in a stable corporate job.
Yet the truth is, there are always excuses to put off getting started. Entrepreneurs with vision and dedication stand a good chance of succeeding regardless of the economic climate – and it might even open up some possibilities.
“Every month, we seem to have new challenges,” says Jonathan Williams, who in 2020 founded Briefly, an app that provides press releases written by sector-relevant journalists. “There are still issues around finding and hiring technical recruits such as developers, and we also face financial obstacles in the form of inflation and rising interest rates.
“But we feel that as a business-to-business brand, there are opportunities in these challenges. We are creating something that offers businesses a more affordable, hopefully better service than they were able to get before. This means that in the current economy, it’s even easier for potential customers to make the decision to move to our platform, as they are saving money and improving results.”
How does inflation affect a new business?
Inflation causes enormous problems for businesses and consumers, who struggle to cope with the rising prices and often choose to cut back on spending as a result.
There are ways to protect your business from inflation, such as increasing your prices, but that risks losing customers who are likely to be sensitive to this, given the current economic environment. Alternatively, you could absorb the price rises yourself, although this will reduce profit margins.
Deepak Shukla, owner of the Pearl Lemon Café brand, recently opened a new shop in London. He explains he's beating inflation by “trying to cut costs and increase prices where that makes sense, while focusing on giving people a great customer experience.”
He continues: "There has been a rise in costs that shows up in higher utility bills and business expenses, which affect business owners who rent their spaces. For a café, there’s a significant electrical usage, so there are high energy costs associated with that.
“Those high operating costs are a big challenge, but there are opportunities in opening up a business post-pandemic. People want to go out more, connect with others and participate in the economy more because restrictions have been lifted.”
Other entrepreneurs are able to absorb some of the rising costs. “We definitely see prices of certain things rising,” says Jonathan. “We’re paying more for some services, but we’re currently able to swallow some of these costs into our subscriptions, which offer great value to users each month anyway.”
How can you be successful in a recession?
While we’re not yet officially in recession, it’s a close-run thing. So is it possible to weather the storm? It might seem counterintuitive, but many of the most successful businesses of recent years have launched during periods of economic turmoil. That includes big companies such as WhatsApp, GroupOn and Uber, all of which were founded in the aftermath of the 2008 financial crash.
Particularly in the wake of the pandemic, consumers are looking to spend money with small, independent companies, which can work in your favour as you start your business journey.
“People are more eager to support independent businesses during this time,” confirms Deepak. “It feels like something that they can really get behind.”
So, is this the best time to start a new business? In reality, launching your own company will always be a risk, but as long as you have a plan, take advice from experts and believe in your idea, you have a good chance of success.
Talk to us
If you’re planning on starting a business, it’s important your own finances are also in order. Contact us for advice – we often work alongside business-growth advisers to make sure that both your business and your personal finances are holistically supporting your goals.