Hard Times Will Likely Create The Next Great Business Idea
If you've tuned into the jobs report lately, you've seen the bad news
. As the Run DMC song says "Unemployment at a record high, people comin', people goin', people born to die...". Although those words were sung 27 years ago, they ring just as true today. With unemployment likely to be sky high for the next several years, you might be surprised to learn that many big companies started out as small companies during recessions.These small companies then went on to make wonderful things and become household names as they gained a reputation. In simple terms, when people are out of work and struggling to make ends meet, they start up and take bigger risks. This is simply because they can't make money any other way. If you have the next big idea, it's always best to check with a small business consultant and get your idea off the ground.
One of the most successful startups was G.E. Most people don't know that General Electric was founded by Thomas Edison. This was after he invented the incandescent light bulb. It was founded in the middle of the Panic of 1873, a recession that lasted for six long years.
Entrepreneurship thrives in times of need, and some companies become successful by adopting to the changing needs of the people. Yellow Book, Inc. started gaining in popularity during the Great Depression. It was sold as a way for people to comparison shop from their own home instead of wasting gas or wear down the leather in their shoes. People who wanted to do their best marketing at the time did so through the Yellow Pages.
Sometimes the best examples of entrepreneurship happen when rivals realize they're better off working together. Before 1930, three cranberry companies, who were all small businesses, were competing to see who would make the best tasting cranberry sauce. Realizing that the consumers were trying to save every penny they could as the Great Depression continued, they pooled their resources. What resulted was the well-known company Ocean Spray, Inc.
Every time there's an economic downturn, you surprisingly find companies that end up being successful. One of the best examples of this was Federal Express. In 1973, during the oil crisis, founder Frederick Smith named his company in the hopes that during the recession, that the Federal Reserve would contract with him. They turned him down but he ended up making an immensely successful international shipping company.
The list of names of companies that started out small and became successful when they started in a recession is mind boggling. Burger King, Trader Joe's, Sports Illustrated, IHOP, Inc., and Hewlett Packard are just some of the names we instantly recognize. Even the most successful company in the world, Microsoft, started off in the garage of Bill Gates in Albuquerque, N.M. in 1975. It dealt in basic computing equipment until MS-DOS catapulted it to success.
Not all of the companies that are successful during a downturn even sold goods. CNN started delivering its 24-hour news broadcast in 1980 and became one of the most trusted names in news. Now are watched by nearly 1 out of 4 people worldwide. Paypal thrived during the recession of 2001-03 and became internationally renowned for being able to send funds electronically anywhere in the world.
In conclusion, recessions have historically made American businesses great. Folks come up with the next big thing because they figure they have nothing to lose. When that happens, the next great idea is born and people wonder how they ever lived without it. Check with a small business consultant and maybe your company name will be as familiar as all the other household names that started during economic hard times.
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