Starting a Small Business During a Recession

Most people think we live in a recession while others believe we’re heading towards another great depression. However, with some good-old-fashioned hard work, determination and a little ingenuity, we can replace those dark and dreary words into something more positive sounding. “Lucrative business opportunity” comes to mind. After all, there is always a niche to be exploited in both good and bad economies. The trick is you’ve got to recognize it and figure out how to take advantage of the niche market.

A recession is one of those rare moments in time that gives entrepreneurs a leg-up in establishing their small businesses while most of the existing ones are too busy trimming their excess baggage. While their greatest fear is heading back into the cellar, you’re already starting from there. So in other words, as a potential small business owner starting from the very bottom, your only direction is going to be upwards. Start from the cellar, or in today’s terms, your parent’s basement, garage, home office or even your local Star Bucks, and you can see yourself shine as a new and upcoming entrepreneur if you play your cards right. Once you achieve a certain level of success you may find that you need to trim the excess baggage in your business organization just like established businesses. Keep in mind that the vicious cycle of growth and stagnation is always constant. Consequently, organizations must adapt to new trends and environments in order to stay afloat.

When starting a business during a recession, you’re dealing with an environment where your competitors have been weakened or nearly blown out of the water. Prices for business purchases such as equipment, office space and personnel have hit rock bottom, which means that the sky can be the limit for you in terms of negotiating bargain deals with suppliers and potential employees.

More important, the influx of highly educated and skilled professionals who are among the high ranks of the unemployed (both officially and unofficially) can be an excellent source for talent that can help your business grow quicker in this recession. People who are used to being a busy and proactive superstar/somebody in a previous work environment will not want to sit idle on the sidelines for too long. From a management perspective, these are definitely the type of people you’d want to let loose in your small business, as long as they know what they are doing as well as producing high-end results for you.

Here are some interesting facts that a recent USA Today article mentioned regarding businesses that started during a recession:

• 16 out of 30 corporations that make up the Dow Jones Industrial Average started during a recession.

• Walt Disney Corporation began during the recession in 1923-1924.

• Hewlett-Packard Corporation began during the Great Depression.

• Microsoft Corporation began during the 1975 recession.

• In the recession of the early 1990s, 25% of downsized executives over the age of 40 years old started their own companies.

 

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