Ben Bierman, Managing Director of Business Partners Limited. Photo: File
Ben Bierman, Managing Director of Business Partners Limited. Photo: File

Recession: A good time to start new business ventures

By Opinion Time of article published Jan 24, 2021

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By Ben Bierman

SOUTH Africa is in the midst of the second wave of Covid-19, having yet to recover economically from the first.

Many would consider starting a new business venture foolish. But if history is anything to go by, recessions have served as a launch pad for some of the world’s most successful businesses. General Electric was launched by Thomas Edison right as America was heading into the Panic of 1893 and Disney, which was incorporated by Walt and Roy Disney, rose at the onset of the Great Depression in 1929.

Here are reasons why a recession may be the right time to start the small business of your dreams:


When the economy is down, people are generally cautious with their money, which means they are less likely to jump into a new business venture. This leaves less competition for those who take the plunge.


Weak economic growth generally means things such as overheads, office space and once-off purchases like machinery and furniture cost less. Vendors are also more likely to discount prices to move stock quicker in a tough economy.


Borrowing rates are at an all-time low. The general consensus is that the SA Reserve Bank will keep its repo rate at a record low of 3.50 percent for the rest of 2021. So, if you need to raise finance for a new venture, now would be the cheapest time to do it.


Covid-19 has left many highly skilled people without a job. This means that talented employees can be found and secured far easier. It is therefore a perfect time to employ highly-skilled employees that will prove critical to your success.


Countless people have taken a salary cut while others have lost their jobs. They are perfectly positioned to jump into the unknown and give your business pipe dream a real shot. .

There is only one way to go after a recession, and that is up. When a crisis precedes a recession, life returns to normal as soon as the threat lifts.There is also a spike in consumer spending. Trade may be slow at first, but there is an inevitable pendulum swing, which entails that things will once again improve - and you will be primed and ready for the boom to follow! Just make sure to do your homework and due diligence to ensure there is demand for your offering and follow all appropriate steps, such as a well-researched business plan and operating with valid appropriate licenses, where applicable.

Ben Bierman is the managing director at Business Partners Limited


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