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Businesses Born in a Crisis Are Wired Differently

Businesses born in a Crisis are wired Differently

Businesses spawned by the GFC are wired differently

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One of the most unexpected trends to emerge from the Global Financial Crisis (GFC) and the recession that followed in many nations, was the number of new businesses which started up even though economic conditions were so difficult.

In the USA, for example, the Kaufmann Foundation’s Index of Entrepreneurial Activity found that new businesses sprouted at a rate of 60,000 a month in 2009, compared to 40,000 a month in 2007.

In Australia, recent research shows that the number of business start-ups in Australia has increased, on average, 6.8 percent per annum over the last five years and is increasing faster than most other developed nations. The increase in micro-businesses and the birth of “mumpreneurs” locally has seen a rise in the number local businesses established yet interestingly, the new businesses that are doing best during this period are those that quickly employed staff and achieved scale. Businesses founded and operated by sole practitioners fared less well, showing that those making bigger entrepreneurial bets did better in tough times than those relying on their own skills alone.

Symantec was fascinated by these results, so we commissioned analyst firm Forrester Research to look into businesses that launched during the GFC. The resulting research revealed a very interesting finding: many of those who started businesses during the GFC did so out of necessity. Many lost a job or found their retirement savings inadequate. Rather than settling for less, those who started businesses during or immediately after the GFC decided to do something more about it. But few had previously nurtured a dream to be their own boss. Many lacked the education and skills conventional entrepreneurs would carefully acquire before starting a new venture.

Tim K. Dean, Credi Founder | Commentator & Expert on Family Lending, Bank of Mum & Dad and Neo-Credit Scores is available for media interviews and appearances. More…

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Credi the #1 lending management platform for friends family & their business

Formalise and manage your loan agreements online with Credi. Trusted by over 7,000 people worldwide. Takes minutes to set up

Use Credi for FREE – for all loans up to  A$5000, $5000 / €5000,  £5000 . Loans over cost A$20, $20, €20,  £20  or other other local currency amounts (sales tax may apply).

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