Entrepreneurs' Weekly Update – 4 October 2021
Recessions Bring Opportunities For Some
A recently published online article by BusinessTech highlighted the dire circumstances South African businesses found themselves in at the turn of the second quarter of 2021.
The outlook may be forecasting a gloomy shadow over small businesses in South Africa but what does it say about your business? And are you going to allow yourself to be part of the crowd or are you going to be the business that not only survives but thrives while others are barely scraping by or liquidating?
Figures released by Statistics South Africa (StatsSA) indicate that almost 1000 businesses have closed shop in the country during the first two quarters of 2021.
For the first half of 2021, 997 companies liquidated vs 763 recorded previously in 2020 (January-June). We can ascribe this to the impact of Covid-19, the Lockdowns, and several other factors. However, recessions are nothing new. Economic crises have occurred throughout history and will continue to do so in the future. The test of a great company is its ability to adapt to change and evolve with the times and still maintain its core values, vision, and mission.
But what about start-up opportunities during these times? During a recession, it is not only about the survival of existing companies, but they also come filled with new opportunities for the discerning entrepreneur. The following are examples of companies that got started during economic recessions whilst other companies were liquidating.
WhatsApp started in 2009 after the global economic recession of 2008.
The transport and delivery company also began in 2009 whilst other companies were experiencing hardship.
This company began during 2008 – the year the Global recession “officially” began.
Netflix began in 1997 during a recession that was credited to the Asian Financial Crises which affected countries outside of Asia.
One of the world’s most impactful companies began during the US “stagflation” recession of 1975
The common thread amongst all these companies is that they are some of the most recognised, impactful, and successful companies in the world but more importantly, they were born out of economic crises where other companies were shutting down – and they too are ICT based companies.
They are tech companies/online companies, and this provides an insight into which companies are likely to thrive in an economic downturn. So, as you’re in tech/ICT – favour is currently on your side!
As the saying goes, “Chaos is a ladder”. Weathering the storm is not enough, it is about thriving and becoming the Microsoft, the Netflix of your industry. Being an industry leader means you have to be the exception. Entrepreneurs are nothing, if not opportunists, and the chaos of Covid-19 and business closures in South Africa presents you and your business the opportunity to stand out and to lead the pack.
I would love to hear your feedback in the comments below as an ICT-based company – what has been your journey, your successes, your insights, and your WINS during these trying times.
"In times of recession there are massive opportunities and fortunes to be made, so for new up and coming entrepreneurs, this is the time to go and start a business.” – Richard Branson
ActionCOACH Thabo Pitse