Recessions happen more often than many people think. When they do, they can cause economic upheaval which is typically characterized by businesses closing and higher-than-average unemployment rates. Despite how gloomy things look, recessions can be a great time to start a side hustle. In this article, we will be looking at why this is so and how starting one can help you survive a recession.

Source of Income

The most obvious way a side hustle helps you during a recession is by helping you make money when the economy is taking a downturn. When a recession happens, a lot of businesses turn to short-term labor arrangements to cut costs.

This cost-cutting measure leads to more contract jobs. If you have skills that can help you land these short-term jobs and contracts, you have a source of income that will help you keep paying the bills until something permanent comes along.

Recessions Cause Problems You Can Solve

As recessions worsen, most businesses tighten their spending, which means they also decrease innovating as that costs money. Because these businesses are not looking for new growth opportunities but instead see this as a time of consolidation, there are numerous opportunities for forward thinkers.

This is the time to look at which products and services larger businesses have stopped providing and start providing them yourself. The slowing down of the global economy leads to shortages of certain products. This is where your advantage lies. We have seen cotton, spices, and numerous other commodity shortages in the past and those who took advantage of such opportunities were able to leverage them into larger businesses.

Low Overheads

Smaller startup and freelance businesses tend to have lower overheads than bigger businesses. If you are in one of these categories, your products or services are likely to be cheaper than those provided by larger companies. This puts you in a prime position to provide alternative products and services.

During times of recession, people and other businesses are looking for cheaper alternatives to the usual products and services they buy. Because of this, they will likely come to you if you have affordable products. Leveraged properly, this can lead to a relatively stable income even when other businesses are slowing down.

Lower Cost of Starting a Side Hassle

If you need office space or equipment to start a side hassle that brings an income, finding what you need during a recession is a great option. Businesses typically sell their assets when the economy takes a downward turn. Some sell their assets, so they do not have to pay to have them stored.

Additionally, many businesses downsize which means there is a lot of commercial real estate supply with little demand. Taking advantage of the happenings discussed above can mean you do not have to spend your entire life savings starting your side hassle.

Because the cost of starting a business will be lower, you get to keep more profits, and this is crucial for surviving the hard times.

Conclusion

Starting a side hustle during a recession can seem like a bad idea, but it does not have to be as long as you know what to do and what to take advantage of.  You can stay afloat by having a somewhat stable source of income, out-competing larger businesses on price, and increasing profits due to a lower cost of doing business.