“Recessions have occurred routinely throughout American history, but they’ve been minor by standards of recent memory, so there’s an entire cadre of executives who’ve never seen anything like this,” says Steven Michael, an associate professor of business administration at the University of Illinois in Urbana-Champaign and co-author of a 2005 study on recession-fueled business failures.
“Executives and entrepreneurs are naturally optimists. They want to focus on what they’re good at,” says Mr. Michael, whose report states that about 500,000 businesses fail in each recession. “It’s a second order of consideration to think about the risk (of continuing to do the same thing).”
In September, New York-based ThomasNet, which connects sellers and buyers in an online industrial marketplace, released the results of a survey that asked 800 executives and professionals how they were handling the recession. About 70% were looking for business in new industries, increasing their marketing, and exploring new sales channels as a way to increase cash flow and dilute risk. And 38% were developing new products. All good signs.
But another study released the same month by New York-based credit card issuer American Express Co. found that 68% of 763 small-business owners and managers were stressed out, and 41% focused mainly on retaining current revenue sources (rather than seeking new ones). Only 26% said they were looking to grow this business.
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Thomas Silvestri
CEO
Opus Global Group
Tel: 773.935.3583
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Email: tsilvestri@opusglobal.net
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