The U.K. is headed for a recession—a recession that is likely to be long and severe. Often, recessions are accompanied by layoffs and job losses, with leaders at risk of sudden unemployment.
Under such circumstances, many leaders will choose to regroup, scrap their resumes, and find another job. However, some people see layoffs as an opportunity to change their lives and possibly start their own business.
So, what should leaders know about running business in a recession?American business and strategy coach Ellie Diop, founder of Ellie Talks Money, Would be nice to give some pointers.
After losing her corporate job during the pandemic, she used a $1,200 stimulus check to build a multimillion-dollar online tutoring business in just one year. Today, her online academy, Ellievated Academy, serves more than 50,000 students, and Diop is dedicated to helping others overcome adversity and build their own successful businesses.
Here are four of her tried-and-true strategies for success:
strategy one: Keep Startup Costs Low
“Choose a business that will make your initial outlay as low as possible,” Diop says. “When I started my company, Ellie Talks Money, I bought a ring light, an upgraded iPhone, a website domain and a Canva Pro membership.”
She continued: “Overall, I spent less than $600. I shared educational content on Instagram for free and spent another $600 within a few months promoting my content on other social media pages. “
If you’re considering starting an e-commerce business at low cost, Diop’s advice is to start by identifying the products you want to sell. Using the TikTok #MadeMeBuyIt hashtag, research the most popular videos and top five online offerings over the past three months. Then, you can create a Shopify account. This step will directly connect you with suppliers such as Alibaba and AliExpress, which will allow you to create products without buying inventory up front (so-called “dropshipping”).
You can create low-cost products, list them on your Shopify store and charge a markup to sell to your customers. Your customers will receive the product directly from the supplier after placing the order.
Another option Diop recommends — and which will appeal to many leaders — is to start a consulting business. Use platforms like Instagram or Linkedin to identify niches or possible topics to cover. These platforms will also help you find clients who need help in your area of expertise. You can then highlight your skills and accomplishments to potential clients, letting them know the value you can bring.
Diop also suggested starting a low-cost business based on digital products. Some digital products that can be sold include prints (digital downloads), workbooks, templates, cookbooks, courses, eBooks and subscriptions.
Strategy 2: Build Community Through Content Creation
“Short pieces of content that are 60 seconds or less help build community on platforms like Instagram and TikTok,” Diop advises. “You can use these videos to educate your audience on a specific topic or industry while keeping them entertained and inspired.”
To build a following, aim to post three to four short pieces of content per day. If you follow this process, you’ll see what’s working by observing audience engagement through the likes, comments, and direct messages your posts generate.
A great tactic to boost growth is to encourage people to leave comments or private messages. “It’s also helpful to offer your audience a free offer, which will direct them to your email list so you can continue to engage with them there,” adds Diop.
Tactic 3: Increase trust by delivering quality
“Putting customers first and achieving results for them should be your top priority,” says Diop. “So think about things like the quality of what you offer and how efficiently your customers can access your service or product. Building an approachable brand while anticipating and responding to their questions is key.”
Diop uses the Thinkific platform to improve the quality of its customers’ learning experience. She found that Thinkific Communities, an online learning environment that enables educators to engage directly with their audiences, allowed her to connect with her community in a streamlined manner. It also gives her customers easy access to her products.
Tactic 4: Strategically Manage Your Expenses to Qualify for Grants
Lack of access to capital is one of the main reasons most businesses fail in their first five years. “Having a strategy that allows you to secure funding from the very early stages of your business is critical,” Diop said. “While funding may not be a requirement to start, it is needed to scale.”
Access to business credit, grants and loans is critical as you expand your team, add new products and services, and develop new marketing strategies. “To qualify for these financing opportunities, it’s important to get your business expenses in order,” advises Diop. “Some basic things you should implement early on include opening a business account, keeping good financial records and keeping personal money separate from business money. You also want to manage your expenses to make sure you’re running a cash flow positive business.”