Recession creates a level playing field for small start-ups says former Dragon

Published on Thursday 18 March 2010 20:16

WOULD-be entrepreneurs should stop fretting about slack demand and a lack of credit, says Doug Richard, as history shows there has never been a better time than now to start up a new business venture.

Richard, today's keynote speaker at the New Start Scotland conference in Glasgow, will be driving this point home when he takes the podium at the SECC. American-born Richard – a former Dragons' Den member who has created and invested in numerous business ventures in the US and the UK – says it is now easier than ever to make an independent living.

"Historically it has been shown that businesses that are started during a downturn tend to be stronger and longer-lived operations," he says.

Richard admits the exact reasons for this are not known, though there are certain factors that work in the favour of start-ups during a recession. One of these is the availability of skilled workers who are either unemployed or what he describes as "unattractively employed".

In addition, smaller firms do not have the resources that larger companies can draw upon to accelerate growth during a boom. This presents a more level playing field for start-ups.

"A lot of the things that slow you down during a momentum economy – which tends to favour the larger guys – are not there during a downturn," he says.

Richard has lived in the UK for the past nine years. He is co-founder and vice-chairman of the Cambridge Angels investment group, and also runs his own entrepreneurial training business, School for Startups.