In a down economy, who could possibly be willing to start up a business? The answer may surprise you.
Perhaps it is people that have experienced a layoff, and despite hard work just can’t find another position that meets their needs. Or maybe they have a little money set aside, strong skills developed through years of work experience and they see an opportunity before them now to branch out on their own.
Contrary to common thinking, just as many businesses are started during recessionary times as during good economic times (statistics taken from a recent study by the Federal Reserve Midwest region). Long-term viability of businesses are also similar, from either starting point. Starting a business during a recession if the project idea is right may be just what is needed to help renew the local economy!
Out of curiosity, we looked to our own SWIF microloan program statistics to analyze the numbers of unemployed that received loans from us since July 1, 2009. Here’s what we found:
- Since that date, SWIF has made 30 microloans (small loans under $35,000).
- Nine of those loans were to people that had lost their jobs during the recession (almost 30 percent).
- Historically, 60 percent of our microloan portfolio has been comprised of women but since the recession started our portfolio has become an even split between men and women.
As the recession has moved through most industries, it is clear that the market has made many decisions for people while at the same time opened up new opportunities.
Passion, experience and capacity are still the most important factors that are needed to make a new business venture successful for the long haul. The opportunity comes when people are forced to look at their career and realize that things will most definitely change over time. Owning your own business is clearly not for everyone. But, if the opportunity is right and you have the skills and capacity this could be the time to take the plunge.
Berny Berger is the Southwest Initiative Foundation’s Microenterprise Program Coordinator. She started SWIF’s microloan Program in 2001 and has been active in both state and national organizations focused on building entrepreneurship in rural areas.
photo credit: Banalities
