Posted by Maneesh Sethi :: April 11, 2009 @ 6:36 am

Here's a surprising fact: now might be the best time to start a business. I know what you're saying: it's a recession! No one should be starting a company! However, for many reasons, the truth may be the opposite - now might be your chance to shine.

This post from Harvard Business Publishing mentions some prominent examples of recent companies started in a downturn, including Clif Bar, Chipotle, Hanna Andersson, Cranium and Honest Tea. Why does this contradiction occur? Why would startups flourish in a terrible economy? An article from Personal Dividends mentions several reasons.

"Cheap resources: Everything from office supplies to rent to machinery are available at low prices, not available just a few years ago...

Lower payroll costs: With unemployment reaching higher and higher levels, there are many skilled workers coming on the market that are willing to take a job at a discount to compensation levels they were enjoying in their past jobs"

Additionally, there are many other reasons. Competition is lower---older companies are failing, and newer companies can operate more cheaply. Being the agile and small startup has many benefits. However, this doesn't mean it will be easy. Starting a company at any time is difficult, but you can use the recession to your advantage. The article from Harvard Business Publishing says it best:

"The bottom line: a downturn presents many unforeseen opportunities. Entrepreneurs view financial challenges and, instead of wringing their hands, find ways to innovate and spin them into gold (or social transformation). It doesn't hurt that entrepreneurs are used to being nimble, responding quickly to market shifts, and managing cash flow."

Have you thought of becoming an entrepreneur? If you are waiting for the recession to end to start your company, maybe today is the day to start. What companies do you think could benefit from a downturn?