Entrepreneurial Opportunities at the Aftermath of the Recession and the Chances of Its Success - Coursework Example

A reflection on entrepreneurship Introduction Entrepreneurship encompasses a wide variety of meanings. It means an activity, which brings in change. This type of quality is very rare and is seen in a very small percentage of people. Another meaning of entrepreneurship is any independent activity, which is started as a new venture. In business parlance, the second view is the more acceptable as it includes anything, which is started new. One of the main features of entrepreneurship is innovation where the identification of new products or newer markets or technology is considered important. (Quickmba,n.d.). In this world of cutthroat competition, the concept of innovation has assumed great importance. To survive in this world every business house has to continuously innovate to attract the customers. In the wake of the recession, numerous business houses all over the world closed their functions or had to cut their size by firing their employees. Millions of people were left jobless in the wake of the recession. The general economic condition was very bad and a belief spread across that venturing into new businesses would be suicidal. However, throughout the history it has been seen that any business catering to the needs of the customers and which, continuously innovates itself survives. This paper deals with the entrepreneurial opportunities at the aftermath of the recession and the chances of its success. Entrepreneurship at the time of recession Entrepreneurship is to start a new business and to explore new opportunities. Recession is a time when the financial world is engulfed in problems and most of the big business houses are on the lookout for cutting costs. All the organizations in the world are striving hard to survive. Some of the biggest names in the corporate world have gone bankrupt. Various traits indicate that the situation is not conducive to start a new business during this time. However, contrary to the popular beliefs, recession is the best time for entrepreneurs to start a new business. Besides other things an entrepreneur gets access to cheap resources like land and people which otherwise would not be possible in normal times. The venture capitalists will be willing to fund their business ambitions, as they would not like to miss the chance of investing in a low interest environment. Also, according to the Venture Capitalists, the recession gives birth to entrepreneurs who are disciplined and hard working. This probably is due to the fact that they strive for their coveted business in such hard times and do not receive things in a platter. Today, the bulk of the new businesses are funded by the venture capitalists. It has become a very important way of financing of new businesses. The venture capitalists receive money from the institutions to earn a return of 30%. If they do not invest and sit still with the money they will be earning very little. Therefore, they tend to invest at the time of recession as they see the brightest ideas coming up at this time. This is the time when the old ways change to newer ideas. The resources are cheap and the expectations are not sky high. To survive in the environment they do not have to perform tremendously well as the industry as a whole performs badly. This leads to an age of entrepreneurship of high values and discipline. The businesses set up in this phase tend to last longer. Another advantage in this phase is that the effect is less bad when the organizations are small. Recession generally effects the larger companies. Therefore, if the business does not work out, the venture capitalists lose comparatively less money owing to cheaper cost of resources. (Raghu,16th March,2009). In addition to these, the recession is the ideal timed to start a business for another reason. This is the time when the competitors don’t mind any new player coming into the field. They are all engrossed in their own activities. This virtually means low competition. Recession also force the companies to shrink their marketing budgets thus making them dependent on the word of mouth advertising. The companies take on promotion activities, which involve personal interaction with the people. This helps in making the company more attached to the public, which helps in the long run. The recession proves a difficult time and that prompts the top management of the company to get down to business and mend the ways of operating. For a new business to start in the recession means that it will not generate cash from the start. Thus, the management will be able to look after the other activities, which will help it to form a strong base. (Silverthorne,29th August,2008). The time of recession is simply a time of opportunity because new businesses during this time receive special attention from both lenders as well as customers. The lenders want to make a higher return than that of the subdued market and thus invest in the venture. The competition is much less during this time. The employees are cheap and they tend to work harder for the fear of losing jobs. Good work is rewarded during this time and the message spreads among the business fraternities fast. Work comes in huge volumes if the quality of the work is maintained. (Nose to the grindstone: entrepreneurship in times of recession,n.d.). The recession offers a big opportunity for small business houses to start but they must be cautious in their approach. A clear financial plan has to be etched out before starting out. During this time, it is of utmost necessity as the resources are generally scarce. The customer service of the business has to be taken care of as it is less costly to hold on an old customer than to go for a new one. All measures has to be taken to satisfy the customers. As money is scarce during this time careful expenditures has to be made. Proper marketing strategies which would help the business in the long run is advisable rather than to invest in mindless campaigns. Newer technology has to be adopted to speed up the processes of the business and to make it more error free. The human resource when recruited is to be trained well so that they can handle the customers well. (Watts,n.d.). Therefore, the recession offers a big opportunity for new businesses to start and build a strong base. Many new business come up during the times of recession and many goes down in the oblivion. Those with strong ethics on discipline and hard work survive and grow in the future. Business ideas at the time of recession Though recession is a good time to start a new business, not all avenues are exciting in terms of starting up. There is a dearth of money during this time and there is a high chance that the business will not survive. Therefore, it is better to start small and to form a strong base. One of the most influential businesses during this time is that of a consultant. This type of business needs networking in the high-level corporate. During times of recession most of the business face problems aplenty about cutting costs, increasing business etc. The consulting business advises on these regards. This business needs highly skilled personnel for the job and requires a low investment. Cosmetics is a recession proof business. The demand is stable all throughout the year. However, this business requires extensive marketing policies and advertising campaigns. Recession offers the opportunity for personal interaction with the customers, which is very helpful in this kind of business. Moreover, the customers are open to the idea of purchasing outside the big brands, as money is the limiting resource here. This is the time when the image of the brand can be build. (Allen,n.d.). Another business, which can be start upon in the times of recession, is that of education. Education as a business has grown in the recent years. Students are always gearing up for higher studies and the number of institutes is still not adequate. This is a business, which has a bright future and provides a steady income. Energy is one of the most effective recession proof industries. The demand for energy is growing day by day and with the development of technology and business all over the world, it would be growing in the future. This type of energy needs huge investment and requires a source from where it can be tapped. As a start up business one can start with the solar energy which is freely available. However, in this case also the infrastructure is costly. But, with Venture Capitalists queuing up to supply money the fund would not be a problem. Health care is another area, which can be ventured into in the times of recession. The physical effects of recession is visible in the individuals and they can form an immediate customer base. Moreover, if they can be supplied with cheap quality services at the time of recession they will lap up the opportunity to get treated. In addition to this, the health care also offers a constant source of income during or not during recession. (King, 15th June,2008). Another industry, which is indifferent to recession, is the food industry. During recession when every other industry was going down, the food industry hold its own and in some states increased its production. McDonalds survived recession in a spectacular manner and continued to grow. This is for the reason that the demand for food is stable irrespective of the condition of the economy. Also, the people like to seek comfort in food when faced with problems. Therefore, this is one business, which can be used as a start up in the recession and the demand is stable all throughout the year. (Top 5 recession proof industries,n.d.) The businesses mentioned above are recession proof and they offer a good source of income in the long run. However, in all of these businesses one has to build the image of the organization in the minds of the customers. The recession is the right time to do such an activity as it offers an ample opportunity as the competition is low. The base can be made stronger in times of recession, which can make for a prosperous future. Conclusion The recession is a time when the global business is shutting their operations and is looking for desperate cost cutting measures. The business sphere has become limited and most of the functions are based on satisfying the existing customers. This troubled time offers a big opportunity for the entrepreneurs to start something new. During this time, the base of the business can be made as the competition is low. This is a perfect opportunity because the cost of the resources is cheap and the finance is readily available. There are some businesses, which can be started during this time and this offers good value in the long run. The businesses are also recession proof and any adverse affects of recession is less likely to fall on them. Moreover the entrepreneurs can devote ample time to build the brand value of the organization. Therefore, this is the right time to start a business to look for a bright future. References: 1. Quickmba.(n.d.). A definition of entrepreneurship. Available at: http://www.quickmba.com/entre/definition/ (Accessed on 25th February, 2010) 2. Watts,K.(n.d.). Entrepreneurship in the time of recession. Available at: http://ezinearticles.com/?Entrepreneurship-in-the-Time-of-Recession&id=924167 (Accessed on 25th February,2010) 3. Raghu,K.(16th March,2009). Recession is best time for entrepreneurs as the resources are cheap. Livemint.com. Available at: http://www.livemint.com/2009/03/16222909/Recession-is-best-time-for-ent.html (Accessed on 25th February,2010) 4. Nose to grindstone: entrepreneurship in times of recession.(n.d.)Sagemedia design. Available at: http://sagemedia.ca/articles/nose-to-the-grindstone-entrepreneurship-in-times-of-recession/ (Accessed on 25th February, 2010) 5. Silverthorne,S.(29th August,2008). Entrepreneurs should love a recession.bnet. Available at: http://blogs.bnet.com/harvard/?p=413 (Accessed on 25th February,2010) 6. Allen,S.(n.d.). Business ideas on a budget.About.com.Available at: http://entrepreneurs.about.com/cs/businessideas/a/10startupideas.htm (accessed on 25th February,2010) 7. King,K(15th June,2008). Top 9 recession proof industries. Available at: http://www.everyjoe.com/articles/top-9-recession-proof-industries-386/ (Accessed on 25th February,2010) 8. Tor 5 recession proof industries.(n.d.). HR guru. Available at: http://hrguru.monster.com/news/articles/3101-top-5-recession-proof-industries?page=5 (Accessed on 25th February, 2010) Read More