I’ve just hosted an event with Make Your Mark at the British Library, called Passions into Profit. The thinking behind the event was simply that at a time when thousands are being made redundant or are unable to find their first job, perhaps working for yourself is a good option. Our three speakers shared their personal stories; Robin Campbell went from banker to baker when she was made redundant and hasn’t looked back since her cake business took off. Her career has literally ended in tiers. Rosie Brooks is a successful illustrator whose clients have included children’s books, national charities and even Paul McCartney. Finally, Matthew Crawford saw his own redundancy as an opportunity to begin a market stall, selling Jamaican Food, and within a year was generating over £400 profit per day. His venture, ‘Easy Nuh’, attracted the attention of the Make Your Mark in the Markets competition, which he won.
For me, the evening raised three questions. Firstly, when should you turn a passion into a profit, and when should it remain just a passion? Secondly, at what point does someone who has decided to set up a venture cease to enjoy their activities, precisely because their business has taken off, meaning that they are drawn away from their original passion. Thirdly, is talk of starting a business in a recession absolute nonsense? It’s this third question which I’d like to focus on.
“Starting a business during a recession is like vacationing in the off season…It’s a little less crowded, and everything goes on sale”
Certainly, people do not stop spending money completely in a downturn, they just behave differently. They look for good deals, for greater value, and for opportunities for doing things a little differently. Enter the entrepreneur. David Cruickshank, CEO of Business IT Online points out that “in a recession, consumers and businesses are looking for savings, so new services that supply them can break through.” Without the burdens of large structures and cost commitments, they can afford to ‘zig whilst others zag’. Dan Martin, editor of Business Zone sums this up when he says “In times of economic gloom, the big players can’t afford to be as flexible as they once were. That’s where nimble SMEs come in.”
Who then, would be crazy enough to start a business during a recession? Someone like Bill Gates, who founded Microsoft in the downturn of 1975. Or Steve Jobs, who launched the iPod in 2001, following the dotcom crash. Years earlier, HP (1939) and Burger King (1954) both began in significant downturns. So it doesn’t always make for a whopper of a mistake.
Why else might starting up make better sense when the financial climate is gloomy? Well for a start, if so many people are losing their jobs, or feeling threatened, then this must be good news for entrepreneurs on the hunt for team members. Tom Allason, founder of ecourier, who is preparing to launch his next business agrees, saying “Talent, the most critical factor to a start-up’s success, is the cheapest and most abundant it has ever been”. Better still, when that talent is taken on, it may be more loyal than in brighter times. Tough times encourage a greater focus on costs and better still, on customers. It can’t be too difficult to argue that if a venture can survive in a recession, its prospects in a boom must be rosy. Finally, remember that this is a great time to get a good deal. Surely this applies to the entrepreneur seeking office space and suppliers, just as much as it does to the holidaymaker or high street shopper.
As unemployment rises, and graduate recruiters close the doors to their schemes, many will see 2009 as a terrible time to become self-employed or to begin a venture. Others remain optimistic. Raj Dey, founder of Enternships has some advice for graduates, asking “Why settle for a job that you don’t want or won’t enjoy? The recession gives you the chance to take stock of your real hopes, dreams and aspirations, and the time to give it a shot.” Meanwhile, Jamie Murray Wells, founder of Glasses Direct thinks that a recession “makes people more comfortable with the idea of radical change.” What an amazing and inspiring way of see the downturn! I look at it this way; our speakers this evening have multiple customers. Multiple clients. Multiple sources of income. By contrast, even the best paid of corporate employees in the room were reliant on just one cash provider. At a time when talent is waiting to be snapped up by entrepreneurial spirits, problems ready to be solved and customers ready for a change, who are the REAL risk takers now?
Photo by Cormac Phelan