Monday, January 11, 2010

What do Microsoft, General Electric, Hewlett Packard and Hyatt all have in common?

Answer - All of these companies were launched in a recession or a bear market. In fact, according to a recent CFO magazine study , more than half of the 2009 Fortune 500 companies exist because an entrepreneur launched them out of seeing an opportunity or out of economic necessity - all during hard times like today. Further, almost half of the 2008 Inc 500 companies had similar recession or bear market origins.

Why is this so? A few reasons are:
  • During times of economic uncertainty, many larger companies deal with layoffs and a worried workforce. This can take the focus away from what should be done the most during times like this, which is focusing on customer service and keeping clientele.
  • Recessions force lower costs across almost all industries and can make it easier for a smaller, startup company to compete for market share that larger companies can not or choose not to embrace.
  • High quality talent becomes more plentiful and often at a lower cost, making it easier to hire key team members.
  • Bigger companies can not react as quickly to opportunity, providing smaller, more nimble companies a competitive edge.
The Kauffman Foundation also has a study, "The Economic Future Just Happened" that also shows that recessions and bear markets can actually be very productive times for entrepreneurship in this country.

So don't let 2010 and a shaky economy hold you down. Register now for Think Big Kansas City, coming up March 3rd, 2010!

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