Is This a Bad Time to Start a Business? Not Necessarily

While the economic impact of the COVID-19 pandemic is still being calculated, those who planned to start a business might be putting said plans in the back burner. However, history tells us that starting a business during a recession is not necessarily a terrible idea, as many global giants took their first steps during periods of economic turmoil.

Today the chief of the International Monetary Fund (IMF), Kristalina Georgieva, warned that the world is now amid a recession caused by COVID-19. While she claims to be comforted by the measures taken by many governments to face the situation, she warns that the depth and length of the recession are linked to the measures taken by countries to respond to the crisis. In Mexico, recession fears are not new. The drop in oil prices, less trust in public institutions and a dip in manufacturing and tourism due to COVID-19 have led private entities to place Mexico’s GDP growth well into the negatives.

This situation might make some potential entrepreneurs weary but others are quick to point to those companies that used a period of economic slowdown to consolidate and later emerge stronger than ever. Some individuals took the plunge, started a company during an economic downturn and are now industry leaders, including giants such as GE (which started in 1890), IBM (1896), Disney (1923), Microsoft (1975) and Apple (2001). The economic effects of COVID-19 are still developing and only time will tell how entrepreneurs will come out on the other side.