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April 29, 2008
Starting a Business
Recession Success Stories
Posted by Ryan McCarthy at 10:52 AM
In our May issue, which is just now hitting the newsstands, we take a look a just what it takes to launch a business during a recession. We look back at the some of the iconic American companies which have weathered recessions during their first year (Coors Brewing, Herman Miller, General Motors and Microsoft, just to name a few).
One company that we featured in our June issue has just been sold for $23 billion, some 117 years after its founding. The New York Times reported yesterday that Mars, one of the largest privately held companies in the world, has offered $23 billion in cash to buy Wrigley, the Chicago-based gum and candy maker.
Wrigley was founded during a period in American history in which recessions happened nearly every year, even if they weren't defined as such at the time. From 1860 to 1900, as the economy began to slowly unwind from the Civil War, the U.S. suffered 10 separate economic recessions, according to the National Bureau of Economic Research. In fact, many economists think the entire period was just one long recession.
William Wrigley, Jr. arrived in Chicago in 1891 with just $32 to his name. The 29-year-old entrepreneur began manufacturing soap, first enticing customers by offering free baking soda with every purchase. He later tried offering customers free chewing gum. The gum soon became more popular – and profitable – than his soap venture. Like many of the famous companies which have sprung up during recessions, Wrigley sold inexpensive goods that could be easily mass produced. Now, I'm not saying that chewing gum actually served as a distraction from the strife of the times, but what kind of startup do you think fairs particularly well during a recession? Do consumers need distraction during downturns? If you have a great business idea, does it even matter when you launch your business?
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I recently received the latest issue and really enjoyed the article. In my business, I speak with a lot of buyers and sellers of web based businesses who have different perceptions of the economic recession - some see it with fear and loathing while many others are seeing it as an opportunity to snap up business acquisitions from sellers who feel the pressure or want to cash out because of uncertainty. I myself have reacted in a similar manner after 9/11 and exited a thriving online business prematurely before it had reached its full potential - only to watch a company that purchased my business become a top Inc 500 company two years in a row!
Opportunity is in the eye of the beholder - many visionaries never let cyclical nature of economics stop their dream from unfolding as the article so eloquently displays.
David Fairley
WebsiteProperties.com
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