Bad economy can be a good time to start a business

By Jim Hart

The Sandy Post, Mar 3, 2009, Updated Oct 30, 2009

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Contrary to popular opinion, Hollis MacLean Wenzel says “a down economy is a good time to start a small business.”

Wenzel, executive director of the Sandy Area Chamber of Commerce, says it’s not just her opinion.

It’s history.

“A lot of really big companies have started during recessions,” she said, “Chili’s, Microsoft, Applebee’s and Famous Amos Cookies. I remember reading that 16 of the 30 companies in the Dow Jones Industrial average started in a recession or depression.”

Small businesses are important to the U.S. economy, Wenzel said, and she backs up her statement with research conducted by the Small Business Administration (SBA).

The SBA reports that 99.7 percent of all employer firms are small businesses employing 500 people or fewer, and those small businesses employ about one-half of all workers. Small firms also have generated between 60 and 80 percent of all new jobs during the past 10 years.

“Small businesses drive a lot of the economy,” Wenzel said. “We’re waiting for large businesses and corporations to bring our economy back, but that’s not where it’s going to happen.”

It could just happen locally by establishing more lodging facilities.

“The one (business) that makes a lot of sense for Sandy is the B-and-B,” she said. “We only have one hotel in town, and it’s often booked to capacity. We’re at the foot of Mount Hood (and on a recreation corridor).”

Financially speaking, this is a good time to start a small business, Wenzel said, because there are a lot of spaces available and probably at reduced prices.

It’s a matter of supply and demand: more supply; less demand; reduced price.

“There’s retail and commercial space available (in Sandy) at below market value,” she said.

Compared to times when the economy is good, Wenzel says people don’t want to walk away from a steady job to start a small business.

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