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Friday, June 19, 2009

Does It Make Sense To Start-Up A Business During This Recession??

In times of economic turmoil and consequently higher unemployment, it is usual that some of the professionals that were laid off may take the initiative of beginning a new career path ..... as an independent consultant or as entrepreneurs by beginning a small business.

Although it is probable that most entrepreneurs will fail 2 years after having begun ..... and angel investors with the willingness of contributing with capital will be scarce ..... past history has taught us that many of the innovations that generated new and revolutionary products were initiated in times of economic uncertainty, market instability, and financial restrictions. And were consolidated once the economic landscape began to experience a healthy and sustained recovery.

Being so, the adagio that says that "Necessity is the Mother of the Invention" appears to be true.

In my humble opinion, this wave of innovation happens when talented professionals .... after being laid off from companies where they worked unhappily in the past and without a promising professional future .... feel compelled to be creative, to develop an innovative mindset, and explore beyond their comfort zones to survive, grow, and succeed.

In the long term, small businesses are key for the financial recovery. Irrespectively of the extent and depth of the current economic turmoil .... there are always likelihoods of success in developing an entrepreneurial venture.

In a nascent business, the experience of being an entrepreneur is a role highly emotive and gratifying when its founders are smart, disciplined, and persistent. Plus, when they assume a passionate attitude, build a sense of purpose, share an inspiring vision, and create an exhilarating climate for young professionals who are willing to accept the challenge of growing professionally with a small, although promising company.

A small business offers the unique and valuable opportunity of building from the personality traits, business vision, managerial style, and professional experience of their leaders and founders. The values, principles, policies, and beliefs that are inherent to the organizational culture must be shared in such a way that they become a key factor of success ..... and propel organic growth for the company for the long term.

Small businesses that are successful in creating customer loyalty, are smart in managing their finances, and provide the means to assure employee satisfaction .... may experience the unique opportunity of enjoying extraordinary patterns of organic growth that increase and multiply their valuation as an ongoing business. And the likelihood of being acquired or merged by a bigger company in such a way where all the involved parties greatly benefit.

Highly motivated "former" employees who are close to their customers, and have the willingness to learn, capacity to innovate, and desire to integrate multidisciplinary teams to work hard and with proved efficiency ...... can transform a dream, a project, and illusion into a highly profitable business.

So the short answer .... is yes.

2 comments:

Mikey said...

I read this in a recent newspaper article (yes, ink on paper). Normally you would expect an uptick in new launches during a recessionary period. However, this not the results seen at SCORE. They attribute it to the lack of funding and resources available to potential entrepreneurs. Comments?

Phil Parkinson said...

This is a great time to start up a new venture if you have the willpower and resources to do so. Alot of companies are cutting costs, staff and getting out of areas that are not their core areas of business, which opens up opportunities for other players to come in and start serving the market and customers being left behind.