Launching or maintaining a small business in this environment isn’t easy.
Access to start-up or growth capital is more limited these days. And many business owners expect increased economic hardships to come. According to the Buffalo Grove, Ill., management consulting firm International Profit Associate’s Small Business Research Board, the Small Business Confidence Index conducted in July hit a historic low – sinking 35% in the second quarter compared with the same time last year.
But in all this pain lies opportunity for some entrepreneurs, says Ken Gaebler, president of private-equity firm Gaebler Ventures in Chicago. While a struggling economy will hurt some businesses, “others will be better off during a downturn,” he notes. When the economy stumbles, “big companies tend to cut back on innovation,” Gaebler says. “You’ll [even] see big companies divesting from businesses.” This means that smaller, more innovative companies can move in and gain market share.
That’s been the strategy for Greg Wozniak, founder of Doors for Builders, a luxury, wooden door maker in Bensenville, Ill. Thanks to the downturn, the company has logged nearly $2 million in sales so far this year, a more than 30% increase over the year before, he says.
“Most of our competitors are cutting costs,” he says. “They have less salespeople and they’re reducing their levels of inventory.” This means many customers have to wait three months or so to get their doors. “We are doing the opposite,” he says.
Photo by Doors For Builders.