It may be surprising, but it can be easier to start a Business in a slow economy. You might have less competition because other would-be entrepreneurs are often more reluctant to risk launching a new business, and existing business owners commonly cut back on costs (especially marketing), limiting the number of new customers they can attract. Of special note is that consumers do not completely stop spending during economic downturns; most simply look for better deals and the companies that can provide those better deals are stronger once the economy improves.  Consumer loyalty to those companies frequently remains strong even after the economy recovers and spending increases again.

Below are some notable examples of successful businesses that were started during economic downturns in U.S. history:

• FedEx Corporation began operations on April 17, 1973 as Federal Express, and today manages daily shipments worldwide.
• GE (General Electric Company) was established in the mid-1870s by Thomas Edison.  In the middle of the Panic of 1873, Edison created one of the best-known inventions of all time, the incandescent light bulb.
• HP (Hewlett-Packard) was inauspiciously born in a Palo Alto, CA, garage at the end of the Great Depression, and now operates in nearly every country in the world.
• Hyatt Corporation opened its first hotel’s doors at the Los Angeles International Airport on September 27, 1957 during the recession of 1958.  The chain rose to worldwide fame in the following decades and now operates more than 365 hotels in 25 countries.
• Microsoft Corporation wasn’t always the company it is today.  In 1975, when it was started by Bill Gates and Paul Allen, Microsoft was just a little company in Albuquerque, NM.  Currently, the company is estimated to earn more than $60 billion in revenue per year.
• CNN might be a news giant now, but in recession-plagued 1980, it was a little-known station called The Cable News Network founded by Ted Turner.  It revolutionized how people received information when it premiered as the first 24-hour all-news channel.  Today, 1.5 billion people around the globe watch CNN.
• MTV Networks brought something new and different to the music scene when it debuted in the economic slump of 1981 and is now a global brand with dozens of television shows.
• Burger King Corporation is another recession startup.  The company began in 1954in Miami, FL.  During another recession in 1957, the company introduced its successful signature burger:  the Whopper.  The company currently operates more than 11,000 locations in over 60 countries.
• The IHOP Corporation chain opened its doors July 1958 in Toluca, CA. The fast growing company, which began franchising just three years later, today has more than 1,300 locations across the U.S.

Recessions, however, are not only advantageous to startups.  Existing companies can make incredible gains in years when the economy is down.  Some of the most recent success stories include Google and PayPal.  From 2000 to 2001 each of these companies thrived, leading PayPal to go public in 2002 and Google in 2004.

If your dream is to start your own business, give us a call.  Not only do we provide Financial Solutions for our clients (including startups) we also offer business consulting services, ensuring that our clients have long-term success.

La Mancha Sims is the Founding Partner and CEO of Triton Financial Solutions, a business funding consulting firm located in Atlanta, Georgia. You can reach La Mancha at 770-249-2357.

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