Advice on setting up a business in a recession

Several people have approached me recently for advice on setting up a new business.  I’m not surprised:  the recession continues to bite, hard.  LinkedIn tells me that “67 of my connections changed jobs last year”.  Many of those have decided to set up their own consultancy or design practice, or perhaps something entirely different.  So what advice can I give them?  I am really not sure.

I set up my company with my business partner in 2004.  The big difference is that we started in a very vibrant economy.  I don’t think we will escape this recession for at least 2 years, and possibly never.  Quite possibly the boom times of cheap energy that began with the Industrial Revolution, sustained colonial expansion and the creation of the ‘developed’ world we know today, are well and truly over.  

Call me a doom-monger, but there are no signs yet that solutions will emerge in time i.e. before cheap fuel runs out, AND to prevent catastrophic climate change.  Just because it’s unimaginably scary and daunting, doesn’t mean it isn’t happening, unfortunately.  If you have had the opportunity to travel, you may well have seen evidence of ancient civilisations that have collapsed due to lack of resources to sustain them in the form they developed: Rome, Egypt, Cambodia, Mayan central America.  We in the ‘developed West’ are highly dependent on resources.  We sometimes forget that it is our way of life that is unusual, not that of the people scraping a drop of water and food from a scorched earth, endlessly running from war and hunger.

I worry for my two year old daughters, I really do.  A long time ago (7/8 years ago) I stopped engaging with environmental issues because it was all too scary, I felt it was too late already, so I just chose to ignore it.  I sort of thought “oh well there’s nothing I can do anyway, best just hope someone sorts it out, anyway I’m quite good at adapting, I’ll likely find a way to be OK, and if not, then better enjoy myself now while the going is good.”  

Now I have children, it is not so easy.

So what advice can I give to my friends who are setting up in business in the depths of global recession, between the rock of peak oil and the hard place of climate change?  Perhaps only one thing:  Money is Trust, nothing more.  When the going gets tough, when resources run out and war looms and inflation hits quadruple figures, your social capital will be more important than your bank balance. That includes, as a priority, thinking hard about whether your business – your life – is contributing to finding positive solutions to the unfathomably big global problems, or is making them worse. This is no time for sitting on the fence.

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5 Responses to Advice on setting up a business in a recession

  1. @PazzaArchitect: OK, feeling more optimistic about energy and the future now, thanks to Artificial Photosynthesis & US Energy Secretary Steven Chu 😀

  2. “@PazzaArchitect: Advice for Businesspeople 1 of 2: the consumer is dead, long live the mircoproducer. Twitterati, bloggerati, trustafarian hactivists. …”

    “@PazzaArchitect: Advice for Businesspeople 2 of 2:  Ethical microproducers are the new ethical consumers. Output measured in millibonos, not dollars.”

  3. If you like this one, look at this. I think this question should be compulsory in all business plans. Future generations will be your customers, after all.

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