During the Great Depression, more people became millionaires than at any other time in U.S. history.
USC and the nation face an interesting problem. Unemployment is very high. Entry-level positions are slim. According to a study by BusinessWeek with data from the U.S. Bureau of Labor Statistics, the percentage of college graduates between age 22 and 27 with jobs has shrunk significantly during the past three years.
The USC Marshall Keenan MBA Career Resource Center has also reported experiencing similar decreases in employer recruitment.
Plenty of students and seniors are facing this issue, with graduation at hand and hardly any jobs to be found.
Yet many books on management and leadership talk about these kinds of situations. What do you do when you have a problem in a business? Change the way you think. Look at it as if it is an opportunity. Then embrace the opportunity and move forward.
During a recession or in times of economic turmoil, many things go awry. Businesses fail. Their capital assets (i.e., everything they own or use to make their products) lose value and become cheap because they are used and difficult to resell. But these failed businesses need to sell these assets because they can no longer utilize it to make their product. Failed business owners want to squeeze even the slightest amount of cash out of these assets.
That’s where the people with unconventional approaches come in.
Rather than moping around jobless, the future millionaires look at this problem, get excited and buy up goods belonging to failed businesses.
In general, business start-up costs are much lower during a recession or any sort of downturn. The general intuition for this is as such: People have less cash, so they want to spend that on food and necessities and desire to spend less on a machine that makes boots — a decrease in demand. People are not thinking to start businesses when companies around them are failing.
According to USA Today, 30 percent of non-franchise businesses fail in the first year. Fifty percent fail in the first five years. These failures usually come from two primary sources: the start-up managers are incompetent or the business just cannot overcome its high costs.
When the economy is booming, a start-up has high initial investment costs. But almost all start-ups are not profitable for one to two years. Businesses need to survive this unprofitable period to grow into something larger and highly profitable.
A business owner would be wise to have these unprofitable initial years coincide with the recessionary time, in anticipation of riding the upturn. This is especially true because many companies struggle through these difficult times, leaving them weak.
It is during this time that an owner can test and refine his business plan.
USC has a great history of entrepreneurial spirit. Many prominent businesses, such as the famous surf wear company Quiksilver, have been started by young and eager Trojan graduates. All it takes is a change in perception of the world mixed with a source of creativity and desire to do something productive.
May the word “problem” become synonymous with “opportunity” for us Trojans. Seniors without job prospects, I hope we can see this jobless time as an opportunity to start something fresh, something new.
Jensen Carlsen is a senior majoring in mathematics and economics. His column, “The Bridge” usually runs Wednesdays.