Starting a Business in an Economic Downturn

In the current economic climate, it seems all we hear about is the bad news; people losing their jobs, companies going out of business, and banks failing. Oftentimes the overload of negative news makes us forget about the power of the entrepreneurial market in the US economy. However, entrepreneurs can be the answer to elevate this economy out of a crisis if we recognize and support their growth.
We are certainly not the only ones to recognize this. A new study from the Kauffman Foundation’s Index of Entrepreneurial Activity shows that in 2008, new business formation increased, specifically entrepreneurship rates increased for the lowest-income-potential and middle-income-potential types of businesses from 2007 to 2008. An average of .32 percent of the adult population created a new business each month in 2008, up slightly from 2007. For women in particular, entrepreneurial activity increased from .20 percent in 2007 to .24 percent in 2008.
Helen McNeece, President of HERS Higher Education Relocation Specialists, began her business in 2008. At the time, corporate relocation management firms had been around for decades but no one in the industry really addressed the diverse needs or understood the decentralized nature of doing business in the higher education market. Helen explains, “I love the higher education market because it is rewarding to work with folks who really appreciate your help and have a higher calling than the almighty dollar but it is not without challenges in the current market. Hiring freezes and slow downs have slowed our anticipated growth by about half.” Yet, she is looking to the future with positivity, “The up side is that there will be a hiring frenzy as things turn around and HERS will be here to make that process a lot smoother.”
Ann Mullen, Founder of Ann Mullen Consulting LLC, recently retired as the Director of the Johnson & Johnson Supplier Diversity Program, but was not ready to leave behind the world of women-owned/minority-owned business development. “I loved my work! I strongly believe that these kinds of businesses play and will continue to play a big role in building a healthy economy in the United States,” said Ann. “So, I decided not to ‘retire,’ instead, I founded a consulting business concentrated on helping corporations build or strengthen their supplier diversity and small business programs. And, even though the economy is facing a lot of challenges right now, I do think that if women-owned businesses concentrate on identifying and then focusing on their target market, there are opportunities available, either right now, or in the near future.” Ann’s new business has kept her busy over the past year, and looking ahead, she expects this trend to continue!
Sarah-Leah Gootnick, started her business, Secretary in Israel in January 2008 “by accident,” she says. Sarah had studied and lived abroad in Jerusalem when an entrepreneurial friend of hers was complaining that he was overwhelmed, so she suggested he get an assistant. He told her he couldn’t find one locally, and Sarah encouraged him to work with her friend who had just moved to Israel. Using new technology, the two were able to work together from different countries, and Sarah’s friend said it was the best assistant he has had! Sarah is excited for the future and motivated to help provide business owners and entrepreneurs in the United States with the best executive assistants they could find anywhere in the world, as well as providing American women in Israel the ability to earn livable wages and have a flexible schedule.
Although news about the economy is glum, entrepreneurs see the potential to thrive. Women are starting businesses in hard times, and surviving with perseverance and confidence in their companies. Helen, Ann, and Sarah are just three examples of how the entrepreneurial market will help to revive the economy and bounce back from this downturn. I recognize that some small and woman-owned businesses are struggling at this time, but hope that the power of entrepreneurial businesses will overcome these difficult times.