Starting a Business During a Recession
Apparently, recessions are a good time to start a business. Who knew? There are several reasons why this is the case.
1. Lower Overhead/ Lower Prices: In a down economy everyone is looking to cut costs. As a new business you can keep your overhead lower than established businesses and therefore offer your services at a lower price. Being small and nimble is essential in a tough economy.
2. High Unemployment: High unemployment means that you can get great employees for a steal. People who are too good to be let go are being let go. If you have a position to fill you will have plenty of people to consider.
3. Sales: In a recession everything goes on sale. You can get a lot of your supplies at a discount because companies are begging for revenue. Lower start up costs make it easier to get into the business you’ve been dreaming about. And help keep your overhead down (See #1).
Here is a list of some famous companies that started during economic downturns.
- Hyatt: Opened its first hotel at Los Angeles International Airport during the Recession of 1957.
- Burger King: Opened the first restaurant in Miami during the Recession of 1953. They introduced the Whopper during the recession of 1957.
- IHOP: Opened its first restaurant in Toluca Lake, Ca during the Recession of 1957.
- FedEx: Delivered its first package during the 1973 Oil Crisis.
- Microsoft: Started writing code during the 1973-1975 stock market crash.
- CNN: Went on the air during the early 1980’s Recession.
- MTV: Went on the air during the early 1980’s Recession.
- Trader Joes: Opened its doors during the Recession of 1957.
- Sports Illustrated: Sold its first magazine during the Recession of 1957.
- GE: Illuminated its first light bulb during the Panic of 1873
- HP: Did God knows what in Palo Alto, Ca during the Great Depression. (With an initial investment of $538, I might add)