Does Today’s economy benefit a Startup?

An entrepreneur is capable of transforming the world and most young companies will continue to grow with innovation. This is why it is important to acknowledge that; startup founders are a unique form of trailblazers as they benefit the economy by introducing radical innovation.

Aside from the obvious positive contribution to the economy, planning a new business in any situation is a challenge of its own, but throwing in a tough economy can bring about unprecedented concerns.

Given the various circumstances that can determine the success of a startup due to economic reasons, it is only wise to consider a few key factors. These features allow innovation to be groomed and developed into an array of future possibilities.

How do startups contribute to the economy?

Before we dive in, it is imperative to establish an understanding of the importance of an economy and what it entails. An economic situation of a country is volatile and is subject to numerous changes such as stock market crashes, natural disasters, bad investments, and more. Yet, it is a fact that startups and their adaptability to situations provide an advantage in the development of a country’s economy.

This feature of flexibility enables the possibility to pivot based on the circumstance, which could eventually determine a startup's success. For instance, during the pandemic, various digital innovations have arisen that can enable a continuation of education and health service to continue being functional and of benefit.

Some of these opportunities build on previous existing opportunities, such as;

l Employment:

The human population is a race that depends on wages for survival and when small businesses with innovations introduce jobs that were not previously available, it aids in creating more employment opportunities. This culminates in the unemployment rate being reduced and permitting room for new skills being developed, leading to unlimited possibilities.

l Living conditions:

Startups are typically always created because they intend to solve a pre-existing issue and by doing so they directly work toward eliminating a problem. These new ideas and strategies, eventually improve the standard of living as they progress toward positive development.

l Monetary Impact:

Improving the economy of a nation through the support of a new business is a clear advantage to an individual personally as well as society in general simply because income generation will be local. This contributes to an advantage as capital and profit would all remain within the country and benefit all parties involved.

These three main factors further contribute to introducing more avenues of e-commerce, remote working, basic health and education services, and overall transforming and improving the work culture for all.

What happens to a startup during a tough economy?

Launching a new venture in the crux of a depleting economy is a risky move for even an established company, and all decisions would need to consider a calculated risk. Periods such as these test your financial reserves and planning which ultimately determine your survival.

For starters, having a financial plan in place will require you as an owner to be aware of all the costs and expenditure that is truly required. Else, how would you know where you should begin when you’re fundraising for startups?

Having said that, being an entrepreneur is an advantage on its own as it can improve the financial success of a country however, your success is dependent on the industry in that you are involved. In addition, your business structure plays a crucial role in surviving tough periods.

As a founder during a recession, you will be able to identify that your competitors might be at a disadvantage and are incapable of progressing forward. This means, that you are in a unique position where you may find yourself having the first-mover advantage whilst simultaneously being able to acquire your competitor’s market as your own as well.

The final verdict…

The mindset that you equip yourself with could determine an expansion in new avenues in the business cultures of the industry workspace, and aid you in your startup expansion.

At the end of the day, you will be faced with a decision that could lead to more mistakes or prosperity. The key to navigating a tough economy depends on your tenacity to outlast it along with the ability to play to your strengths.

However, you should not neglect your shortcomings and should conduct a thorough assessment and implement a strategy to continue improving. Your creativity as a startup founder, will set you apart from your competitors, and build on your customer base.

To learn more about startups/investors/fundraising, visit EquityMatch.co website, https://www.equitymatch.co/ for more information.

Malka Amarathunga is an entrepreneur, a content writer, and currently employed as the head of business development at www.equitymatch.co.As a content writer, she writes about startups and entrepreneurship.