Forced Entrepreneurship and the Recession-Era Start-Up

Posted by: Neil Callanan

Who in their right mind would start a business while most are cutting back and laying off? It turns out, more than you'd think. The unstable economic climate has brought about a whole batch entrepreneurs, many of whom were laid off from their previous employers, and decided to jump out on their own. (present company included). It's been referred to as  "forced entrepreneurship", however it is not a new phenomenon.  In fact, the Kauffman Foundation for Entrepreneurship recently put out a study that found that more than half of the fortune 500 were founded in a downturn. 

So why should you start a business if you've recently been laid off, or if your looking for a new adventure? Quite simply, there is no better time than today. The reasons in the hundreds, but a few that stand out for me.

• Money is cheap- interest rates are low, and with SBA backing, banks will give it out to just about anyone with a decent business plan.
• Technology has leveled the playing field - The days of expensive hardware, software,  phone systems and contracts are gone. Grab a virtual phone system with an 800 number, your mobile phone, and an Internet connection and you are off and running. There is a whole slew of free or close to free resources that give small businesses a leg up.
• Smart talent is everywhere - and its on sale. Loads of experienced employees near the top of their profession are looking for gainful employment, with much smaller price tags than a few years ago. The window to scoop them up will close as fast as it opened.
• It'll take months to find a job anyway - at least for the lot of folks. Estimates place most job searches closer to 6 months rather than 6 weeks. You could probably drum up some pretty good business in 6 months don't you think?