Not everyone suffered during the Great Depression. More people became millionaires during this time than in any other time in American history. Opportunities, that were not present during the 1920s economic boom times, suddenly became available. An economic downturn is a good time to start a business. Start-up costs are much lower in a recession than in boom periods. Savvy entrepreneurs edged in and positioned themselves for when the economic climate improved. Many poorly run businesses closed during the Depression years and their equipment and assets could be bought at fireside sales for next to nothing. Commercial rents were cheap and wages were low. There was also time to get the business fundamentals right before increased orders made it too hectic for the entrepreneur to build and test his business model. It was these ‘if you can dream it, you can do it’ Great Depression entrepreneurs that made the best of the crisis to provide a service, or product, for new markets.
Who were some of these maverick entrepreneurs? Some very famous names made their money during the Depression era. In Kentucky, a grandfather, called Colonel Sanders, started serving fried chicken at his gas station. By 1937 he had expended to a 142 seat restaurant due to popular demand. Two young electrical engineering graduates stared a electrical machine business in a rented garage during the 1930s. Bill Hewlett and Dave Packard officially became business partners in 1939 with only $538 in investment money.
Many people with small amounts of liquid cash were able to buy bankrupt businesses at bargain prices. Towards the end of the 1930s some business people watched the upsurge in military spending by some countries. The world was preparing for war and those that invested in companies that made in-demand products for the government stood to make lots of money. Companies dealing with shipping, military vehicles, textiles (for uniforms, tents, etc.), metals (copper, steel, aluminum and iron), shipping and petroleum products made a fortune. Well known companies that were bought at this time were John Deere, Reynolds Metals and Douglas Aircraft.
Another huge opportunity was real estate. During the Depression years, demand was low and thus prices were low as well. Visionary business people knew that real estate values would go up in the future and when they did they used the equity to leverage their business growth and expansions. Those wise folk that were not caught up in the stock market frenzy in the 1920s, and saved their cash, were well positioned to snap up bargain businesses and became millionaires as a result.