Starting a business during a recession

Author: Ashley

1 Apr

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)

Resources:
14 businesses that started in recessions
List of recessions in the US

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Filed under: business

3 Responses for "Starting a business during a recession"

Mrs. Money April 1st, 2009 at 4:34 pm 1
How cool that all those businesses were started during a recession! You always find such neat facts.
Queercents » Blog Archive » No job? Start Your Own Business May 1st, 2009 at 2:35 pm 2
[...] a business during a recession is a good idea. Ashley at Wide Open Wallet shares several reasons why now is a good time. One of those reasons is that everything is on sale and now is a good time to buy: 3. Sales: In a [...]
Samuel Haley August 19th, 2009 at 7:42 am 3
Readign this story I would like to note that it was very interesting to know that Burger King: Opened the first restaurant in Miami during the Recession of 1953. They introduced the Whopper during the recession of 1957. Taking into account the current economical situation in the World it should be noted that this article is actual today.