Last Updated on April 1, 2020
IRA Financial’s Adam Bergman discusses why a bad economy is the best time to start a business. He also talks about how he started IRA Financial after the 2008 financial crisis.
Back in 2008, IRA Financial’s Adam Bergman suffered through the financial crisis like everyone else. The law firm he worked for went bankrupt and it was time to decide on his future. Yes, he had offers from other firms. But, that would be more of the same old stuff. What he really wanted, like many Americans, was to start his own business. Thanks to his father’s advice, he realized that it may be the best time to start a business. Which, when you think about, doesn’t make much sense. Or does it? 2020 feels a lot like 2008, so maybe you want reasons to not return to your old job and start a business for yourself.
Why is A Crisis the Best Time to Start a Business?
That’s the big questions isn’t it? Why, during these economic times, should you look at starting your own business? Before we answer that, let’s be clear: our first thoughts are with the health and well-being of everyone. We hope this crisis will be contained as quickly as possible. Our hope is that everyone makes it through this, in all aspects of their lives. At IRA Financial, we want to ensure everyone has options, including how to be financially secure once this nightmare is over. So, today, we’ll focus on those considering starting their own business.
The country is essentially closed for business. Many Americans may be out of a job by the time this is over. We thank those people who essential right now. They are going above and beyond, especially doctors, nurses and everyone else in the health care industry. However, what about those of you who may have been (or soon will be) laid off. Current businesses may not have enough to sustain after this pandemic. There’s a lot of people with time on their hands right now.
If you’re sitting at home, with nothing to do except listen to podcasts and watch videos, now is the time to research. If you have a business in mind, learn all you can about it. What’s needed to start it? How much capital do you have and need? Is there a need for it in your neighborhood? What spaces are out there that you can rent? Learn everything you can about your intended business while you have the time.
Starting your own business takes creativity. This can be anything from the type of business you choose, the service you offer or how to fund it. You’ll need to be creative to start a business during tough economic times. Thanks to the CARES Act, it’s easier than ever to use retirement funds to start a business. You can decide if you want to borrow money from a 401(k) or simply withdraw the money penalty-free. This is a creative way to fund your business if you don’t have enough cash on hand.
There are so many business opportunities during these times. Unfortunately, many businesses may fail due to the coronavirus. While we don’t wish that on anyone, sometimes you need to look out for yourself. Families might need to downsize. Real estate may be an option for someone. Foodies might consider their own restaurant, food truck or meal kit business. It’s all about how creative you want to get with the business you choose.
Nothing tests someone’s work ethic like a financial crisis. When you are living the dream earning six figures at your dream job, you might slack off. Coasting at your last job because you are stuck at your position? Your work ethic may be at a low. When you decide to go out on your own, you need a great work ethic. When times are great, again, you might not put your all into something, and still succeed. If times are bad, your ethic will usually decide if you fail or succeed.
Creating a good work ethic from the start may be the best advice someone can get. When your financial stability, and your future, rely on your business, you will do everything in your power to get it off the ground. However, that’s just the beginning. Only by continuing good habits will the business grow. By starting your businesses during a crisis, you will set yourself up with a great work ethic.
More People to Hire
Obviously, not everyone can start his or her own business. This means there will be plenty of people to choose from when you start yours. You can pick and choose employees who share the same work ethic as you. Afterall, their financial stability depends on your business if hired. Starting a business with a great core, will lead to even more success.
Since the supply may be greater than the demand, you may be tempted to low-ball workers. If you want to succeed, it’s best to avoid “cheap labor.” Yes, it may save you money, but a good, hardworking employee is worth every penny you spend on them. This goes back to the core of your business. Start strong and continue to grow. Your business is only as good as the people that work for you. Of course, an owner-only business may be in your future as well. In that case, take the labor costs you are saving and look at hiring professionals to help with your business plan. Financial planners, lawyers, accountants and designers can really help you get the most out of your potential.
Create a Business that Cares
Lastly, at a time like this, it’s important that everyone shows compassion. Reaching out to your community with your new business goes a lot in deciding how well it will do. Talk with other business owners, elected officials and neighbors alike. Being the new kid on the block doesn’t have to be a bad thing. It’s just a matter of how you interact with your surroundings. If you’re not outgoing or appear standoffish, it probably won’t sit well, and you may be doomed from the start.
Building trust within the community can involve many things. This may be offering special deals, sponsoring a local team or donating time and resources. Every little bit helps, since the friendlier you are, the more the word will spread about your business. Let’s make that a positive thing, not a negative!
Take the Advice of Adam Bergman
After the last financial crisis, Mr. Bergman had a decision to make. Would he continue his career at a new firm, doing the same stuff he grew tired of? Or would he take the advice of his father and go out on his own. He had his own “light-bulb moment” when he learned about the Self-Directed IRA. He took the time off to learn everything he could about these retirement plans. Further, he realized the potential and the creativity these plans could offer. He assembled a trusted team, many who have been here since the beginning, and off he went. Maybe you will have your Aha! moment now.
As always, thanks for listening to our latest podcast (recorded from home of course!) and be sure to listen to all of them on our SoundCloud page. We wish all the best to our listeners and if you decide to start your own business, please share with us!