Ellie Diop, founder of Ellie Talks Money
The U.K. is heading toward recession – a recession that could be long and severe. Typically, recessions are accompanied by corporate retrenchment and job losses, with leaders at risk of finding themselves suddenly out of work.
Many leaders in this situation will chose to regroup, dust off their resumes and apply for other jobs. Some, however, will see redundancy as an opportunity to change their lives and possibly start their own businesses.
So, what should leaders know about starting a business in a recession? U.S.-based business and strategy coach Ellie Diop, founder of Ellie Talks Money, is in a great position to offer some pointers.
After losing her corporate job during the pandemic, she used her $1,200 stimulus check to build a multi-million-dollar online coaching business in just one year. Today her online academy, Ellievated Academy, serves over 50,000 students and Diop is committed to helping other people overcome their circumstances to build their own successful businesses.
These are her four tried-and-tested strategies for success:
Strategy 1: Keep your startup costs low
“Choose a business that will allow you to keep your initial outlay as low as possible,” says Diop. “When I launched my business, Ellie Talks Money, I bought a ring light, an upgraded iPhone, a website domain and a Canva Pro membership.”
She continues: “In total, that cost me less than $600. I shared educational content for free on Instagram and spent another $600 over a few months to promote my content on other social media pages.”
If you are thinking of starting an e-commerce business at a low cost, Diop’s advice is to first identify the product you want to sell. Use the TikTok #MadeMeBuyIt hashtag and research the most-liked videos and top five products trending online in the last three months. You can then create a Shopify account. That step will directly connect you with suppliers like Alibaba and AliExpress, which will allow you to create a product without purchasing inventory upfront (what is known as “dropshipping”).
You can create low-cost products, list them on your Shopify store and charge a mark-up to sell to your customers. Your customers will receive the product directly from the supplier after placing an order.
Another option recommended by Diop – one that will be favored by many leaders – is to start a consulting business. Identify a niche or possible topics to cover using platforms such as Instagram or Linkedin. These platforms will also help you to find clients needing assistance in your area of specialty. You can then highlight your skills and accomplishments to your potential clients, so they understand the value you can bring.
Diop also suggests starting a low-cost business based on digital products. Some of the digital products that can be sold include printables (digital downloads), workbooks, templates, recipes, courses, eBooks and subscriptions.
Strategy 2: Build community through content creation
“Short-form content videos of 60 seconds or less can help build a community on platforms such as Instagram and TikTok,” advises Diop. “You can use those videos to educate your audience on a specific topic or industry, while also keeping them entertained and inspired.”
To build a following, aim to release three to four pieces of short-form content per day. As you follow this process, you’ll know what is working by observing your audience’s engagement through the likes, comments, and direct messages that your posts generate.
An important strategy to increase growth is to encourage people to leave comments or direct messages. “It’s also helpful to provide a free offer to your audience that will direct them to your email list so you can continue to engage with them there,” adds Diop.
Strategy 3: Increase trust by delivering quality
“Putting your customer first and achieving results for your customer should be your top priority,” says Diop. “So, consider things such as the quality of your offerings and how efficiently your customer will be able to access your services or products. Building an approachable brand while anticipating and being responsive to their questions is key.”
Diop uses the Thinkific platform to elevate the quality of her customers’ learning experiences. She has found that Thinkific Communities (an online learning environment that enables educators to interact directly with their audience) has allowed her to connect with her community in a streamlined way. It also provides her customers with easy access to her products.
Strategy 4: Strategically manage your expenses to qualify for funding
Lack of access to capital is one of the leading reasons why most businesses fail in the first five years. “Building a strategy that will give you access to capital from the early days of your business is essential,” says Diop. “While funding may not be a requirement to start, it will be needed to scale.”
When you are expanding your team, adding new products and services, and developing new marketing strategies, it is essential to have access to business credit, grants and loans. “To qualify for those funding opportunities, it’s important to keep your business expenses extremely organized,” recommends Diop. “Some of the essential things you should implement early on include opening a business account, keeping good financial records, and separating personal funds from business funds. You also want to manage your expenses to ensure that you run a cash-flow-positive business.”
