Did the Recession Help Your Business?
By Rieva Lesonsky | In Change management, Leadership, Management, Operations | August 21, 2013
You might be doing a double-take at the question in the headline above. But in a recent survey by American Express OPEN, more than 4 out of 5 entrepreneurs said the Great Recession actually helped their companies by forcing them to become better business owners.
Some 81 percent of Gen Y and 80 percent of Baby Boomer entrepreneurs report they’ve gained new skills by successfully steering their companies through the recession, the OPEN Ages study found. Dealing with the recession forced entrepreneurs to become more creative in their marketing (50 percent of Gen Y and 40 percent of Baby Boomers) and to improve their financial management (83 percent of Gen Y and 77 percent of Baby Boomers). As a result, Gen Y-owned small businesses have experienced 24 percent revenue growth in the past three years, while Baby Boomers have seen growth of 10 percent.
Baby Boomers seem to be handling the recession’s aftermath a little better than Gen Y—maybe because they’ve already been through several economic downturns and have more experience in getting through them. In fact, Boomers are feeling comfortable enough to ease up on their growth plans and focus on work-life balance. Less than half of Boomers say growth is the top priority for their businesses (47 percent vs. 66 percent of Gen Y). Instead, they are working an hour less per day (9 hours per day vs. 10 in 2007), cutting back on caffeine (2 beverages per day, down from 3 in 2007) and making fun a priority in their businesses (73 percent up from 66 percent in 2007).
Generation Y and the Boomers have different motivations for business ownership. The primary reason Gen Y became entrepreneurs was to do something they are passionate about (26 percent). For Baby Boomers, however, the motivation was a tie between being their own boss and making money (each 28 percent). Both generations are satisfied, with Gen Y say doing what they are passionate about is what makes them happiest (56 percent), and Baby Boomers saying that being independent is what makes them happiest (64 percent).
However, while younger entrepreneurs are typically seen as risktakers, Gen Y is becoming a bit more cautious in the recession’s aftermath. Today, just 56 percent say they like taking risks (down from 72 percent in 2007), and just 16 percent are launching businesses straight out of school (down from 28 percent in 2007).
Is this a good thing or a bad thing? Passion tempered with caution can be a great instigator for starting a business—as long as your caution doesn’t slow you down too much.