Companies Born During Downturns

Don't think it's the right time to start a new business. Some of today's powerhouse companies were born turning during economic downturns.

Some stories of inspiration:

Procter & Gamble
Founded during: The Panic of 1837
Two brothers-in-law, candle maker William Procter and soap maker James Gamble, decided to join forces to start a small household-goods business in Cincinnati. The two stuck it out through six years of financial struggles and went on to score lucrative contracts to supply necessities to the Union Army during the Civil War. Today, the couple produces many of the most recognizable brands in the United States, including: Pampers, Oral-B, Tide, Iams, Duracell, and Pringles. Revenues for 2008 totaled $83.5 billion.

IBM

Founded during: The Long Depression, 1873-1896
Three startups - the Tabulating Machine Company, the International Time Recording Company and the Computing Scale Corporation - launched during this 23-year period with technologies that were in demand despite the down economy. Their inventions included a time clock for recording workers' hours and a tabulating machine was vital during the immigration wave. The three companies merged in 1911 as the Computing-Tabulating-Recording Company, which renamed to IBM several years later. This technology powerhouse has thrived through rough times in its past including a 1960's antitrust action by the U.S. Department of Justice and the movement away from mainframe computers to personal computers. operations. Despite consumers cutting back on technology purchases last year, the company saw its revenues rise based on the outsourcing of technology services and a had record revenue of $103.6 billion.

General Electric

Founded during: Panic of 1873

Opened as a laboratory by inventor Thomas Edison in 1876, it was there that he produced the first light bulb in 1879. Edison used the economic downturn as a time to gain momentum to start a company he called Edison General Electric Company. The company posted $183 billion in revenues in 2008.

Starbucks Says Hello To a New Day

Starbucks took a hit last year when McDonalds added coffee house coffees to their menu, now the brand is taking on their newest competitor head-on by introducing their very own "value" oriented menu.

The company announced it's new "Hello To a New Day" promotion which will pair food and drink items at a reasonable price of $3.95. Yep, you can pair a latte with a piece of coffee cake or a cup of house blend with one of their new breakfast sandwiches.

Included in the $3.95 deal are one of four hot sandwiches which are currently sold at half of its U.S. locations or a slice of cinnamon swirl coffee cake or a bowl of oatmeal coupled with a tall drip coffee or a tall latte.

Of course, Starbucks is officially refusing to call it a value menu, but prefers to refer to it as a adjustment to the new economy.

The Stimulus Plan: What's In It for Small Businesses

As a consultant who specializes in helping small businesses I get a lot of questions about how the economy is affecting my clients. Following last night's Presidential news conference, the topic changes today to what impact the stimulus package would have on the small business marketplace.

Both the House and Senate seem to agree that bank loans need to start flowing again. As we've seen over the past six months, small businesses both new and existing have found it challenging to find operating capital from banks willing to lend in these turbulent times. While both houses of Congress have plans on how to solve the problem, the solutions are wildly different.

The House stimulus plan which was passed two weeks ago, focuses primarily on increasing the guarantees that the Small Business Administration makes to banks that issue small business loans. The House bill directly earmarks $440 million of the total $820 billion directly for these small business initiatives.

The Senate plan which was passed Tuesday wouldn't change the SBA's loan guarantees, but would temporarily eliminate the fees the SBA charges for its guarantees. It sets aside $615 million exclusively to cover the dropped fees. The SBA's small microloans program is a secondary focus of the Senate bill. The Senate would allocate $6 million in new funding for the microloan program - plus an additional $24 million for marketing, management and technical assistance to lenders who make those microloans. In total, the Senate's proposed direct stimulus spending for small business initiatives adds up to $730 million, out of the bill's estimated $838 billion cost.

The Senate and House bills are now moving to conference to negotiate a final compromise bill. President Obama hopes to sign the final bill into law this week.