3 Reasons This Recession Is The Best Time To Quit Your Job And Start A Business
Updated: Nov 1, 2022
Written by: Stacey Marmolejo, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Have you been dreaming of owning your own business but never dared to take the leap? Your job is too good to leave but not good enough to want to stay. Don’t wait until you're laid off to start the business of your dreams. Do it now so you’re ready to employ the laid-off workers when they are looking for a new job.
2022 has already seen a wave of layoffs caused by slower-than-predicted business growth and rising labor costs. The layoffs have spanned across many industries and the forecast for next year isn’t any better. Financial experts are coaching their clients with the traditional methods of protecting their money: Beef up your “emergency fund,” remove all “unnecessary” spending (like Netflix subscription, your lawn mowing service), strengthen your job network, find out how your severance package works and review your equity and stock options.) This is a very defensive posture. Instead, why not take an offensive approach? Many people think a job is secure. The challenge with that is you don’t know who is on the chopping block until you get the call to come to the conference room at 4:00 pm on a Friday. As you enter the room you see the H.R. manager there with a stack of papers in front of her and your direct supervisor looking down at the table. At that time you know you are about to be laid off. When you own your own business, you see the storm brewing on the horizon and you can take steps to protect yourself. In other words, not knowing does NOT equate to job security, Several industries do well during a recession.
During a recession, the first thing people cut back on is nonessential goods. Businesses like restaurants, fashion retailers, and other consumer goods are likely to take a hit. However, industries that do well in a recession includes:
healthcare
alcohol
discount retailers
child-related products/services
pet industry
financial industry
tech support
Repairs
As a friend of mine says, ”The dirtier the job, the more money to be made.” You may be thinking, “I don’t want to get dirty.” If that’s you, reframe that thought. YOU don’t have to get dirty. You need to hire people who will get dirty. Imagine owning a “pooper scooper” business. Yes, you could scoop poop. Or you could be responsible for marketing, sales, and operations and hire people to do the doody work. Would it surprise you to learn that you can earn a 6-figure net income on a business that picks up poop? Or what about a restoration business? Do you think if someone has a pipe burst in their house and the lower level floods that they aren’t going to get that repaired because they’re in a recession? Of course, they'll get it repaired. How about a restoration business? Don’t know anything about these industries? The good news is you don’t have to. If you can follow directions, you can be successful with a franchise business model. There are over 4,000 franchise brands available, including plenty in the recession-resistant industries. Why buying a franchise now is the best strategy to combat the ramifications the recession may have on Corporate employees. Executives/Mid-level Managers can either get caught in the storm(and have to work more hours to cover for those who have been laid off or deal with being laid off themselves) or they can use this time to reinvent and reinvigorate themselves and bring a newly needed service to their community. A franchise is not only a means to employment, but it is also a long-term investment strategy. A person may choose to “buy themself their dream job,” or they may opt to divert their investment funds from the stock market and into a closer-to-home/hands-on investment like owning a franchise.
Think of your first business as your starter house.
Even if you can’t afford to buy your dream business right now doesn’t mean you can’t buy your own business. Think of your first business as you think of a starter house. Buy something you can afford, grow it/improve it and then flip it. As an example, you aren’t going to cut your teeth on a Chick-fil-a. Because so many people want one, they can be very selective about who they sell franchises to. Why buy a franchise instead of starting an independent business?
Franchises are easier to get funding for. Between the SBA allocating a portion of their loans specifically for franchises and the fact that a franchise has documented financial performance, banks are more inclined to provide a loan to buy a franchise than they are to start an independent business.
Franchises are less expensive to start because you skip the start-up stage. This likely seems counterintuitive because of the upfront franchise fee, but many start-up expenses that face every business have already been taken care of in the case of a franchise. (logo and brand development, marketing, and advertising campaigns, recipes tested, etc.) Also, negotiated discount pricing for the network may reduce a franchisee’s start-up expenses. Plus, since a franchise comes with a tested plan, mistakes can be avoided that could otherwise cost tens of thousands of dollars.
Franchise businesses outrank independent businesses in search engines which gives them an advantage over independents. Because the majority of franchises have one website with a separate page for each owner, franchise sites generate more “google juice” than an independent start-up could do on its own.
Franchises reach profitability in half the time of independent start-ups. Independent startups take three to four years to be profitable, on average while Franchises take one-to-two years to be profitable, on average.
When it’s time to sell the business, a franchise is valued 10-20% more than an independent business that sells the same products/services.
However, If you are dead set on starting an independent business instead of a franchise, be sure to consider these start-up tips. The third reason to start your business NOW is that fewer people are, which gives you a “first-to-market” advantage in your community.
Contact Career Transition Coach Stacey today to see how she can assist you in exploring franchise ownership.
Stacey Marmolejo, Executive Contributor Brainz Magazine
Stacey Marmolejo is a Career Transition Coach. She helps people who want to leave their job to own their own business. She is the creator of Franchise Prep Academy which provides unbiased courses on all you need to know to buy the franchise business that is right for you. After 25 years of climbing the corporate ladder, Stacey gave up a prestigious Senior Vice President position with a national firm to purchase a start-up franchise.16 years later, as one of the Top 10% of franchisees, she successfully sold her franchise business and now dedicates her time to helping others who want to pursue a similar path to career success and life happiness.
