you’d think the small business market must shrink in a recession. but you’d be wrong.
and it can be a fatal mistake, according to warrillow & co. researchers.
the net number of small businesses actually grows during a downturn. the number of start-ups actually increases compared with previous years.
the reason: trouble in the corporate sector tends to serve as a launching pad for would-be entrepreneurs.
where do you think all the smart, aggressive, educated, a-type personalities at lehman brothers, goldman sachs, and aig are going?  many start their own businesses.
in fact, the small business market offers steady growth and stability through a recession. especially when compared to consumer markets. consumer spending surges in good times, and then swing wildly during recessions.
year-over-year peak-to-trough changes in the small business growth rate are less than a third of the drops seen in discretionary consumer spending. the small business market is not only an important source of diversification for enterprise companies, but also a relative safe haven for investment during recessions.
