If you have lost your job during the recent recession, you may think it a good idea to work for yourself for a change. Since the recession started people starting their own small businesses or otherwise became self-employed rose 0.3% and since January 2008 there has been an increase of 34%. It only makes sense that if you cannot get a job; the next best answer is to make one. As Paul Davidson of USA Today stated, “Recessions are often launchpads for the mavericks, as the jobless have nothing to lose.” While this seems like a good idea for many on the surface, it is proving problematic for many as small businesses have been hit harder than big corporations in the recession. Some of the reasons for this are that banks are less likely to loan money to unestablished people during trying times, but some reasons might also be that bigger corporations are able to offer short term promotions that will lure in customers more so than a small business would be able to do the same. The recessions effect on small business are important to us all as much of our population across the country is employed by small business..jpg)
The federal government seems to continually bail-out the large corporations that are already doing better than smaller businesses. Some have called for a bail-out for the American people or the idea of bailing out smaller businesses may appear to be the answer. The truth is that by bailing out big corporations the government is really, in turn, hurting the self-employed as the corporations will be able to offer more incentives to purchase from them, further squashing the competition. By not bailing out large businesses, they will be forced to allow their prices to return to the normal range from the artificially low promotional ones and the small businesses can get consumers to purchase from them based upon service and quality.
If you are thinking about starting your own business remember that even in a great financial climate it is difficult to keep a business running. If you were to start a business in a time other than a recession you have about a 50% chance of surviving, and this likelihood is further worsened by a bad economic climate. Regardless of what kind of climate we are in, it is always important to have a product or service that people want, but is not currently on the market, or one that is by far superior to anything on the market at this time. Be innovative. You have to remember the times and price your product accordingly so that consumers can afford it. It may be best in a recession to focus on products that help people save money and are more back to the basics. Niche products are not going to work. And make sure that you have the capitol to put up yourself, or at least a large portion of it, as banks may have gotten a large amount of money from us, but are still not likely to lend money to someone without collateral. As far as the government goes? We need to end the bailouts so that we all have the opportunity to compete, not just the established big ones.
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