The current recession has erased millions of dollars, eroded property values, reduced trade, and eradicated hundreds of thousands of jobs.
So for many, starting a business in this economic climate would be unthinkable, right? Not necessarily.
“Culture, a good infrastructure, and a lenient regulatory and tax environment all make Nashville an attractive place for entrepreneurs,” said Dr. Jeff Cornwall, Entrepreneurship Chair at Belmont University’s Massey School of Business.
One of the reasons that a recession presents opportunity is that running a business becomes less expensive, Cornwall said. But turning a profit after costs are covered is much more of a challenge because consumer spending is down.
It helps too that Nashville was ranked 15th on Forbes’s 2008 list of Best Places for Business and Careers, which is determined by four factors: cost of doing business, job growth, educational attainment and metro area population.
So some entrepreneurs, such as Lonnie Spivak, see the crisis as an opportunity.
“Right now, people are having such a hard time letting go of dollars. People have even been looking to barter, but we have people that we have to pay too,” remarked Spivak, founder of C-Suite Portfolios.
Spivak founded his company at the height of the recession in March of this year. The company designs and produces comprehensive portfolios for business professionals.
He got the idea for the company after collaborating with an advertiser to design a resume for a client. Spivak turned out a 12-page dynamic resume that garnered that client four job offers within days.
The hope is that business professionals looking to distinguish themselves would use the company’s services. Because so many people had lost their jobs, Spivak anticipated an onslaught of requests.
“When we started we thought we’d have more work than we can handle, but honestly its been slow and its been hard getting people educated about our product, he said.
Some giants have beaten the odds
While Spivak hopes his startup can be another success story, the odds aren’t good. About 80 percent of startups eventually fail.
As inspiration though Spivak and others like him look to the many global corporations that got their start during a recession, including Burger King, CNN, General Electric and Microsoft.
Educating the public has been the biggest challenge for the C-Suite. How to educate the public without spending the company into the ground remains Spivak’s main concern.
Todd Fetherling, head of the Nashville Technology Council, is currently in the process of building an entrepreneurship center at the Area Chamber of Commerce.
Before his role at the Chamber, Fetherling started up four different technology companies in Nashville.
“Some people say that it is hard to network in Nashville, and I can see how that might be true,” said Fetherling. He claims that because the market is so spread out, it can be difficult to attract enough customers.
Potential customers are becoming job seekers however.
Recent data from the Bureau of Labor Statistics reveals that for every five job seekers, less than one job is available. The NCAC (Nashville Career Advancement Center) has seen their numbers double since March.
In the stretch of June 1-July 24, the Tennessee Career Center at MetroCenter served 3,834 jobseekers, said Tonya Evrenson, NCAC program director.
Tent City, a riverfront area inhabited by homeless city residents, has been stretched to its limit as new arrivals have set up tents and makeshift camps amongst the trees.
The unemployed are facing tougher competition than ever before; the most recent data puts Nashville’s unemployment rate at 9.4 percent, meaning that there are 24,000 more people looking for work than this time last year.
Nashville a good place to start
Still, as grim as the outlook may seem, experts like Cornwall believe Nashville is an excellent place to start a business.
“In a growing economy, some businesses succeed in spite of themselves, but that doesn’t happen during a recession; entrepreneurs have to be very shrewd in terms of execution,” said Cornwall.
When asked what he would tell other entrepreneurs, Spivak said that the two most important things to remember were: First, go in with a good plan, and second, know your demographic.
Spivak assumed that business professionals would line up to pay for his services. But recessions tighten pocket books, and even products that facilitate employment aren’t in demand. If no one is hiring, talking someone into paying hundreds for a resume becomes a tall task.
With workers scrambling to set themselves apart though, Spivak realizes that a niche has opened.