The headlines are shouting doom and gloom about the macro-economics of the country and the world. From inflation to staffing woes (“quiet quitting”) to lack of VC funding and higher interest rates, there are a million reasons why you could say that right now is not the time to quit your job.
But here’s the secret – companies that start in times of economic hardship often do great long-term.
See, there are opportunities out there right now. You can solve problems. And boy, are there a lot of problems.
But you have to be smart.
Wasting Away With Venture Capital Money
Just a year or two ago, the venture capitalists were throwing money at company founders. And they weren’t being smart about it.
Investors were worried about things like market share and growth. But they were not focused on smart growth.
Now, with things getting tighter (especially with the cheap money drying up from the Fed), those same investors are telling Founders “we want to see profit.”
Do you know how hard it is to go from free wheeling spending to tight fiscal policy? I mean, we see it regularly on the national political scene. But it also is really tough at the corporate level.
These companies have been told to show a profit, now. Or else the top leadership will be out.
For years, they have been over-hiring and spending like crazy on facilities. Often with little product or service to show for it. Or they have been gaining market share at a loss.
That’s why you are seeing so many layoffs, particularly in certain sectors, right now. They have been running businesses in horrible ways that are definitely not fiscally responsible.
Smart Processes, Tight Spending
One of the things that often sets companies that start during recessions, depressions, or other tight economic times is that they are better run.
Founders will know how the money is being spent. They know where their revenue is coming from. They have good processes in place to monitor both revenue and expenses to maintain a profit.
If you bootstrap your way to profitability, those investors (or even bankers, if you would rather grow through debt) know that you can run a company that will make money.
That makes your company all the more attractive.
Whether you are looking for a long-term money making venture or something that you want to grow to sell, being profitable is always in style.
This won’t be the Last Recession
Unfortunately, we know this won’t be the last time that we go through an economic downturn. It’s part of business.
That’s why you need to start with great processes. Start with a focus on profitability.
You do that, and it won’t matter what is going on out there in the world. You’ll be ready to survive the storms that come your way.
And I’m sure that we can find an investor, if that’s how you want to grow.