This might be a great time to start a business

July 2009 News & Events

With the world’s economy in recession, there has been considerable pessimism about business opportunities. Global gross domestic product (GDP) growth is projected to decline by about 2% in 2009 from the 4,8% that was witnessed two years ago.

With caution pervading the marketplace, jobs are being shed, investments are being scaled back and credit is tight. What is counter-intuitive though, is that it may also be a great time to start a business.

“Some of today’s top corporations started in the middle of a recession,” explains Frost & Sullivan’s (http://www.frost.com) chief economist, Vinnie Aggarwal. “16 of the 30 companies that make up the Dow industrial average can claim such an origin story.”

General Electric began during the panic of 1873, and the Great Depression saw the birth of Hewlett-Packard. More recent examples include Supercuts, Famous Amos cookies, Chilis, and Microsoft, which all started in the turmoil of the 1970s. Sun Microsystems, Compaq Computer, and Adobe Systems began operations in the 1980s recession.

“Times of recession offer unique opportunities to start a successful business,” Aggarwal says. “Recessions change the way in which businesses operate, clients consume, and competitors compete, all of which can be advantageous to a new business.”

A critical quality of a recession is that it disrupts the economy’s normal rhythm, presenting a unique opportunity for new businesses to take advantage. There is an urgent need for new ideas and solution to address critical requirements in the marketplace.

As companies cut back, there is increased demand for low-price alternatives, especially as clients loosen their brand loyalties in the search for cheaper alternatives. Potential competitors are also likely to be weakened by the recession, presenting an opportunity for new companies to expand into their fields.

In these environments companies also reflect more seriously about the basic business essentials. In boom times when credit is loose, it may be easier to obtain funding for an 'off-the-wall idea', but in an economic downturn, entrepreneurs must refine their thinking and develop more solid business plans for the future.

“There is also a wider pool of applicants to choose from, as many of today’s top talents are being let go,” Aggarwal adds. “Moreover, startup companies are also more likely to have a more committed startup team to work with, as employees are more committed to their success.”

Additionally, while starting a business in a time of boom may mean quitting a secure and lucrative job, there is less risk when one is unemployed.

“Starting a business is hard, regardless of the economic circumstances,” Aggarwal concludes. “However, starting a business in a recession is no more difficult and offers its own set of unique opportunities, allowing one to stay one step ahead when the boom times return.”

2009 Business LaunchPad offers entrepreneurs access to a R50 million

Writing a business plan is an intimidating challenge for even the most experienced business person – let alone an entrepreneur starting up a small business.

The good news for entrepreneurs who want to get funding for their start-up or growing business is that the R50-m FNB Enablis Seda Business LaunchPad competition no longer requires a full business plan to enter.

The 2009 competition – now in its fifth year of identifying South Africa’s most promising small business entrepreneurs – has introduced a sophisticated on-line system which assists entrants to submit a summarised start-up or business expansion proposal. This is easier, faster and more concise than a conventional business plan – while containing all the key business information needed by the judges.

In certain provinces where the provincial government is partnering with the initiative, provincial competitions will still distribute printed entry forms to ensure that aspiring small business owners who lack affordable computer access can still enter.

This year for the first time the Small Enterprise Development Agency – the main government agency responsible for small business development – has come on board, joining FNB, Microsoft and Khula Enterprise Finance as the main competition partners.

To enter, go to www.launchpad2009.biz and register as an entrant. You can then start working on your business proposal using the special template.

For more information contact Patrick Cairns, Corporate Communications – Africa, +27 (0)18 468 2315, [email protected], www.frost.com





Share this article:
Share via emailShare via LinkedInPrint this page



Further reading:

Highest increase in global cyberattacks in two years
Information Security News & Events
Check Point Global Research released new data on Q2 2024 cyber-attack trends, noting a 30% global increase in Q2 2024, with Africa experiencing the highest average weekly per organisation.

Read more...
Phishing attacks through SVG image files
Kaspersky News & Events Information Security
Kaspersky has detected a new trend: attackers are distributing phishing emails to individual and corporate users with attachments in SVG (Scalable Vector Graphics) files, a format commonly used for storing images.

Read more...
Fully-integrated browser AI
News & Events
Opera Mini now provides all its smartphone users with its own free built-in browser AI, Aria, including AI chat, Ask Aria and image generation. According to an Opera survey, 80% of South Africans want AI tools integrated into their browser.

Read more...
Amendments to the Private Security Industry Regulations
Technews Publishing Agriculture (Industry) News & Events Associations
SANSEA, SASA, National Security Forum, CEO, TAPSOSA, and LASA oppose recently published Amendments to the Private Security Industry Regulations regarding firearms.

Read more...
Local innovation driving excellence in FM
Securex South Africa News & Events
As organisations seek cost-effective, sustainable, and high-quality solutions, home-grown facilities management innovation is proving to be a critical driver of operational efficiency and long-term success.

Read more...
PIV-ready High Sec Controller 7000
News & Events
Gallagher Security announced the release of the latest addition to its controller product range; the High Sec Controller 7000, which incorporates all the core functions of the C7000 Standard variant released less than 18 months ago.

Read more...
The impact of GenAI on cybersecurity
Sophos News & Events Information Security
Sophos survey finds that 89% of IT leaders worry GenAI flaws could negatively impact their organisation’s cybersecurity strategies, with 87% of respondents stating they were concerned about a resulting lack of cybersecurity accountability.

Read more...
Lack of optimism for African economy
News & Events
African Leadership University publishes the 2025 Africa Workforce Readiness Survey, which shows that only 21% of South African employers are optimistic about the future of the country’s economy, the lowest of any country polled.

Read more...
From the editor's desk: What’s a trillion between friends?
Technews Publishing News & Events
Back in the bad old days of 2015, some (who didn’t want to take the blame for coming up with that number) estimated the amount of money lost to corruption by the South African government to be around ...

Read more...
Closing physical security loopholes
Securex South Africa News & Events
Relying on outdated physical security measures can expose businesses and facilities to threats in today’s fast-evolving security landscape. Fortunately, advances in security technology are helping organisations stay ahead of threats by closing critical security gaps.

Read more...