The Rise of Small Business in 2009

My economic indicator shows bubbling activity in Business Start-Up Land!

Out of the rubble of the 2008-2009 economic turmoil, many people seem to be contemplating going their own way and starting a business. And while I was an economics major at Harvard and still read the Financial Times every day, my economic indicator is a simple one: my in-box! Lately, we at Y INTERACT have been getting a higher than usual number of phone calls along the lines of "I've got a friend who is starting a business and they need a website…", or, "Do you do logos?..." This also includes current clients who are already in business but are branching into new entities.

It's classic Economics 101 at work – an economy on its knees is prime time to start a new business, for a couple of reasons:

1. After personal economic circumstances shift, many who have contemplated living the dream of running their own company decide to take the plunge and go their own way. After all, if you've lost your job and are having a tough time finding a new one, what have you got to lose, right?


2. Start up expenses, everything from talent to supplies to office space (if you're in the market for it), can often be found at discounted rates due to a soft economy.


3. And lastly, potential clients (consumers and companies) often start looking for alternatives to their current vendor list – smaller more nimble shops that can accomplish the same task sooner and cheaper!

I started my design studio, Y INTERACT, in aftermath of the dotcom bubble bust (the dot BOMB!), and that was now – knock on wood – over eight and a half years ago. Fingers crossed for another eight and a half.

And, contrary to what you might read about in the tech rags and in the news, most new businesses aren't financed with millions of dollars of venture capital funding. Most are done via good 'ole fashioned boot-strappin' it: Tapping into the savings, borrowing, bartering, etc.

I just dug up a stat (click here) saying that 25% of all startups fail within their first year, and over half (55%) will fail within five years. So, the trick is not actually starting a business, but STAYING in business once the dust settles around you.

Here's to all ambitions to make the 45% Club!

Ahmed A Yearwood
President
Y INTERACT
http://www.yinteract.com
Follow me on Twitter @yinteract