May 28, 2020 is a daily online magazine covering small business news. We help entrepreneurs transform ideas and innovations into greatness.

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Has The Credit Crunch Dampened Entrepreneurial Spirit?

Written by Jay Shapiro for Gaebler Ventures

The credit crunch brought a feeling of doom and gloom to many. With long established businesses being seen to collapse, was entrepreneurial spirit dampened?

Understandably the credit crunch devastation that resulted in long-established companies like Woolworths and Lehman Bros folding left many onlookers feeling more than a little querulous about whether mid or post crunch was a good time to start a business or even continue with an existing one.

So, has the credit crunch dampened entrepreneurial spirit?

First off, because entrepreneurial spirit is hard to describe or quantify it's never going to be possible to answer that question with complete accuracy. However, what is clear is that the determined entrepreneur is one that will always aim to make good of a bad situation.

A downturn for some can mean an upturn for the businessperson with entrepreneurial leanings. In times of financial turbulence it is natural to feel like burying our heads in the sand and hoping it will all go away. The true entrepreneur will think differently about a downturn and he or she knows it won't go away. They simply take advantage of the set of circumstances they find themselves in, however dire they might be. There is, in the mind of an entrepreneur, always a realistic way forward. Backwards is not an option.

The really savvy business owners, those who were determined not to let the crunch affect them, benefitted from buying bankruptcy stock at low cost. Is this mercenary behavior? A heartless way of operating in the face of others' misfortunes? It's possibly seen like that but, the entrepreneur looks at the bigger picture. And life must go on. In terms of a given nation's economy the fact that people do, and always have, carried on in the face of adversity should be seen as a positive thing.

If entrepreneurs might equally be described as opportunists then a financial downturn can mean a world of opportunity for them. Some even go so far as to believe that the real get up and go of an entrepreneur kicks in big time in times of adversity.

The Kauffman Foundation recently report revealed that around 6 million small businesses started up in 2007. This represented an increase in the number of start up ventures seen in 2006. While the most interesting data would be that which tells us how many of those 6 million businesses are still trading, the statistics are still relevant to the question posed above. Has the credit crunch dampened entrepreneurial spirit?

The Kauffman Foundation figures show that despite the credit crunch, or perhaps even because of it, people were still starting new companies. In short that would suggest that the credit crunch not only failed to dampen entrepreneurial spirit, it actually fueled many entrepreneurs into action.

Some business coaches even advised clients to start up new businesses in the face of the crash. Much of the psychology behind this thinking has to do with endurance testing. A business that can thrive in times of hardship will achieve sky high success during leaner times.

Where sink or swim scenarios are presented it is the buoyancy of the business itself combined with the spirit of the entrepreneur that dictates whether or not a drowning will take place.

Jay Shapiro is a freelance writer based in the UK. Jay has a particular interest in the emotive aspects of the entrepreneur's character. "Alongside the nuts and bolts of business, the character of the person is often the ingredient responsible for success."

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