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Every economy needs entrepreneurial skills to fully exploit its human resources and prosper. During the times of down-sizing and recession when everyone in big companies is running around like headless chickens, do small businesses really make a difference in an economy? Lets ponder over this thought.

Did you know? The Bank of America was initially established as a small business and has grown to its glorious position as a corporate giant. There are an estimated 29.2 million small business enterprises in America. As inconspicuous as they may seem, small businesses are vital to bring innovation and drive competition in an economy. They increase national GDP (gross domestic product). Clients now have more trust in small businesses than they do in larger companies. Small businesses have successfully developed a sense of trust and security in people around them. Irrespective of the fact that they do not generate turnovers in millions, small businesses provide sustainability to the economy. They are easy to manage, very flexible and easily adapt to economic changes.

Creating More Employment: Although a small business may typically employ around five hundred people, they help generate employment opportunities. While multinational corporates focus on recruiting people with laudable educational qualifications, small businesses hire people even with most unimpressive resumes along with providing training and development. In the American economy, small businesses have alone provided employment to almost half of those engaged in the private sector. If you were to compare the total number of people employed by all small business firms as compared to big businesses, you will observe that percentage of employment generated by small businesses is higher. This is evident in the fact that annually, small businesses have generated more than 60% of total new employment opportunities in the U.S. economy in the last ten years. Also, these jobs are created at a faster pace too because many small businesses are more inclined towards increasing than work force, while big corporates concentrate on wealth generation through higher investments. During periods of lay-offs prevailing in the entire economy, the number of small-business start-ups will go up even though big corporates will downsize. The banks will fund these new businesses and stimulate the velocity of money.

Small Businesses are the Backbone of Our Economy: The oft repeated statement “small businesses are the backbone of our economy” stands true in modern-day economies. Although many small businesses in the economy may depend on outsourcing by larger companies, if they did not exist, so wouldn’t the big businesses. While, small businesses create more products and services, they also help circulate money in the economy quickly. Small businesses are also more enthusiastic and willing to create strong customer relationships and reliability amongst the employees. They work at the micro-level of economics and create a base for the macro-economic stage through the multiplier effect. They cater not only to households directly but also aid multinationals with their products and services. However, many huge clients are now turning to small businesses to contract financially significant projects fascinated with the friendly and reliable work environment. Also, the scope for growth of innovation for an employee is much higher when employed by a small business, evident statistically that they generate 13 times more patents per employee than any large patenting enterprise.

Thus, small business are important to the economy because they encourage growth and development. In fact, during times of recession, the turnover of small businesses is least affected. You wouldn’t expect a small business to quickly downsize and cut back on its workforce in a depressive economy. If you have been gloomy about not being able to find a job, exploit your skills and interests and learn how to start a small business from your fellow small business entrepreneurs, 53% of whom run a home-based business and need very low investment. Small is the way to go.

It is said that making money during recession is quite difficult. However, there are some ways to earn a reasonable amount of money in such times. Let’s have a look at them.

Recession is the time when the economy slows down and the growth of a country begins to decline. During this phase, businesses suffer huge losses, employees lose their jobs and the spending capacity of people is reduced. The thought of recession instills worry and people think, it is very difficult to survive during a recession. What happens when we have a recession? People start spending less and save money which was otherwise spent lavishly, businesses cut down extra and unnecessary costs, people look for value for money, and companies are more inclined towards maintenance than expansion. It is true that the spending capacity is reduced, but people do spend money. Now what they look for is competitive pricing, low maintenance and value. People think that making money during economic recession is not possible, but there is always a way out.

Let’s see how to make money during recession in not-so-challenging ways

Ways to Make Money During Recession
• Beauty, repair and consultancy services are some of the businesses to start in a recession. These services do not require huge investments and always have a market. Beginning with a small setup can fetch good returns and help in overcoming recession-related monetary stress.
• Your creative skills like photography and painting can fetch additional income for your expenditure. Investing a small amount in studio packages can help in taking pictures of individuals and families, for which a small fee can be charged by the customers.
• A small office can be set up to advise customers on tax laws and tax returns. A person having good knowledge about tax laws can start this business by simply investing in a desk, computer, calculator and tax return software.
• Garage sales can be another option for fetching money by selling unused items lying in the house. During extreme financial crunch, one can choose to sell costly items like DVD player, television, etc.
• If teaching is your passion, you can always conduct classes for teaching a new trade to people. Search for teaching locations wherein, people who run such locations share a certain percentage of registration fees with the teacher in exchange of lessons provided to community members.
• Some businesses maintain a steady state even during recession. Utility and law firms are examples of businesses which are not really affected. In fact, they need temporary workers to deal with increased cases of bankruptcy during these times. Finding a job in such firms will ensure a steady flow of income during recession.
• Skilled individuals in the field of painting and carpentry can offer their services at lower prices than established contractors in the business. As people try to save every bit of money during recession, your offer can fetch you lot of customers.
• Municipal bonds can be a source of income in tough times. People can withdraw their money from stocks and transfer them to municipal bonds, but before doing this, it is better to analyze whether it will fetch you good monthly and annual returns according to your budget or not.
• Blogging sites and other websites can also be a good source of income during recession. By placing advertisements intelligently on the websites, one can make a good amount of money through the virtual world.
• If you already have a website, it’s time to optimize it, so that search engines can locate it and attract prospective customers to visit the website. This increases the chances of sales thereby, adding to your income.
• If you are into a business, advertising your product or service becomes very important to gain customer attention. Customers must be constantly reminded of the availability of the product, only then, they can think of buying your product.
…End Note
Tough times call for tough measures. Even though recession makes money-making difficult, there is always a smart way to tackle tough situations. Therefore the next time you think of recession, you know how to find your way out.