Wednesday AM December 30th, 2009
by: Ed Mayberry, December 30, 2009 9:12:00 am
There's a pattern: more than 17,600 new businesses formed during the recession in the early 1990s. More than 55,000 new businesses were recorded during the 2002-2003 recession, according to the Small Business Administration. In spite of recessions, there are increases in business formation, as Paul Kellogg with Hughes Watters Askanase explains.
"For one thing, the recession caused a lot of people to lose their jobs or they reached a point where they weren't going to go any higher where they were, and they realized that. That makes a good opportunity to sort of try something new that they maybe always wanted to do, or they just feel that they need a new direction or don't have any choice. Many people these days with very few assets—hard assets—start a new business. A lot of the assets you do need, if you do need to rent a place, or you need some small assets, prices are down. And there's business to be had, even in a bad economy like that."
Kellogg says it takes a lot of research and planning to successfully launch a new business.
"Very few people know all of the aspects of it, and most people underestimate just how long and how much it's going to cost. It costs twice as much and takes twice as long to do anything you want to do. And if you can hook up with somebody who's willing to mentor you, that's great. Business advisory groups that will help you out. But there are lots and lots of resources out there, and like you say, you can do a lot of research online. You need to sit back and do some planning and lay out all the steps that will get you where you want to be."
Kellogg says the downturn has produced a 20 per cent uptick in business formation work at Hughes Watters Askanase.