5 Businesses That Started During A Recession
Is there a perfect time to start a business? Conventional logic may dictate that starting a business during times when the economy is faltering may not be the best idea, but history bears plenty of evidence that businesses can find solid footing even in the worst of economies. Here are a few of the world's best known companies that got their starts when the economy wasn't at its best.
The recession of 1973 to 1975 saw a Harvard dropout named Bill Gates start a small company in Albuquerque, N.M. that specialized in developing computer languages. Microsoft's first blockbuster product, MS-DOS, went on to power IBM computers. Today, Microsoft Windows and Office products are found on the majority of computers. That, along with its many other products, results in more than US$77 billion per year in revenue.
FedEx was incorporated in 1971 as Federal Express, but didn't begin operations until the 1973 recession. Federal Express was born from a Yale term paper written by Frederick Smith who believed that a company devoted to fast delivery to cities of all sizes was a valuable niche company. He started with 14 aircraft, deliveries to 25 cities and 389 employees. Today, FedEx has 628 aircraft, over 90,000 delivery vehicles and more than 300,000 employees resulting in US$40 billion in annual revenue.
General Electric was founded in the depression of 1873 by inventor Thomas Edison, creator of the incandescent light bulb. The depression saw half of the nation's railroads declare bankruptcy and half of the country's iron furnaces shut down. What was started by a single investment bank shutting down led to what is now called a panic, but Edison opened a small laboratory in 1876 that would later become General Electric. Today, GE has more than 300,000 employees and a cash hoard of more than US$88 billion.
Revlon, one of the best-known cosmetic companies in the world, was founded in 1932 during the Great Depression. Brothers Charles and Joseph Revlon introduced their opaque nail enamel to the world, which sparked a business that became a multi-million-dollar enterprise in only six years. Revlon now generates more than $1 billion in revenue each year and employs 5,200 people worldwide.
Opening an upscale hotel in the middle of a recession doesn't seem like the best of ideas, but Hyatt Hotels did exactly that when Jay Pritzker purchased the Hyatt House motel next to Los Angeles International Airport in 1957. That recession lasted two years. Today, Hyatt Corporation operates 524 properties in 46 countries and employs about 50,000 employees. Hyatt's 2012 revenue totaled US$3.95 billion.
Some of the biggest and most successful companies in the world were started during a recession. From GE in the 1800s to FedEx in the 70s, these businesses are still holding strong today. While many people may think starting a business during an economic downturn is a bad idea, these corporations have proven that it isn't always a bad thing.