A Recession: The Best Time to Start a Business?

Since the 1970s, I do not remember such a volatile time for our economy. I was born in the early-1960s and was still relatively young in the 1970s, so most of what I remember is from the articles and the newspapers my dear Grandmother saved for me. John F. Kennedy arrives in Rome; John F. Kennedy is assassinated. United States Supreme Court rules 8 to 1 against allowing the reciting of Bible verses and the Lord's Prayer in public schools. The first disco opens in Los Angeles, Whiskey A Go-Go. And how could we forget Neil Armstrong and his first steps on the moon? The U.S. has not endured a deep and prolonged recession in more than a quarter-century — enough time for many Americans to forget what one feels like.

We have evolved from the hippy Sixties to the environmentally aware Seventies, a female–focused liberated society, where opposition of nuclear arms and the oil crisis propelled us into a recession. Can we use knowledge of the past to help better prepare us for the future? Undoubtedly, this approach has been highlighted and implemented before. We must endeavor to learn from past mistakes in order to avoid making them again in the future.

The recession stretched on for a year and a half in the 1970s. Nearly 2.2 million people lost their jobs. By the end of 1974, the Dow Jones Industrial Average had lost more than 40 percent of its value. Although there were many economic problems, the 1970s did have a “silver lining” that we will hopefully see repeat itself in our current economic downturn.
The 1970s was the best decade of the 20th century for startup companies. Many of the companies that have become household names over the years were founded during this time, including: FedEx Corp., Apple Inc., Cisco, GenProbe, DNA Detection, Charles Schwab, Southwest Airlines Co., Microsoft Corp., and Merck.

Startup companies can come in all forms, including those that are simply lifestyle companies, but the phrase "startup company" is often associated with high growth, technology-oriented companies. Investors are generally most attracted to companies distinguished by their risk/reward profile and scalability. Successful startups are typically more scalable than an established business, in the sense that they can potentially grow rapidly with limited investment of capital, labor or land.

Startups enjoy several unique options for funding. Venture capital firms and angel investors may help startup companies begin operations, exchanging cash for an equity stake. In practice though, many startups are initially funded by the founders themselves.

A critical task in setting up a business is to conduct research in order to validate, assess and develop the ideas or business concepts in addition to opportunities to establish a deeper understanding of the ideas or business concepts as well as their commercial potential.