Did You Start Your Business During the Recession?

An article by admin    No Comments

Contrary to popular belief, recessions do not spur entrepreneurship, at least according to a study released by the Kauffman Foundation.

In this study, data from the U.S. Census Bureau, the Small Business Administration and the Bureau of Labor Statistics, covering 1977 through March 2009 was used.  “About 600,000 new businesses were formed each year during that 30-year period. The data includes formally established new enterprises as well as new franchise locations and other outposts of existing companies,” wrote Elizabeth Montalbano in the Business Week article, “Surprise:  Recessions Don’t Spark Business Startups.”

Still, there are viable reasons why starting a business during a recession may seem appealing, especially for those who have been laid off as a result of the downturn.

1. Recently laid off workers have the newfound freedom to start over and choose the career path that they desire, which may often be entrepreneurship.
2. Startup costs are often lower during a recession.
3. Customers are more willing to look less-expensive alternatives to the products or services they currently use.

Discussion Question:  Was your business born out a recession?  Explain.