The Recession Offers Growth Opportunities for CPAs

Source: CPA Trendlines

The following blog entry of November 6, 2008, is presented in its entirety with permission. The blog discusses increases in new business start-ups during recessions. We think it offers obvious opportunities for CPA growth.

Look to Small Biz to Lead the Economic Recovery

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 swings 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.

From CPA Trendlines, http://cpatrendlines.com/, November 6, 2008.