If there are no jobs...

...then make up your own. That's what this intrepid band ofentrepreneurs did - and the benefits are clear to see on theirbalance sheets, as they tell Robin Barton

For 18 months up to the end of 2009, Sam Alison - owner,designer, salesman and postboy of Singular Cycles - would get up at4am to deliver bike-frames to a TNT depot in Luton before driving toWatford and taking the train into the City of London to work a fullday as a marketing manager. He then spent the night in his shed,preparing more frames for dispatch.

Alison founded Singular Cycles in 2007, designing steel bike-frames that were then manufactured in Taiwan. But it was only asideline, stemming from his love of cycling, and he was reluctant togive up his day job in finance. Then, as repercussions from thefinancial crisis rippled through his firm, the decision was made forhim: Alison accepted redundancy and Singular went full-time. "Itwasn't something that ran deeply through me," he says now of beingan entrepreneur. "But good business is about doing the right thingwhen opportunities present themselves."

Alison is not alone in becoming his own boss: one recent surveyof Companies House data revealed that more than 200,000 newbusinesses were registered in the first half of 2010. Entrepreneurshave traditionally viewed recessions much as magpies view roadkill:an opportunity amid misfortune. Interest rates can be low, skilledpeople are hungry for work and the government of the day oftenoffers a financial leg-up to start-ups. In the 1980s, under MargaretThatcher, this was the Enterprise Allowance Scheme, which guaranteeda year's worth of dole money to unemployed workers with a brightidea for a business if they could match it - somehow, anyhow. Aquarter of a million new businesses (such as Alan McGee's CreationRecords, the indie label that discovered Oasis) were formed in thefirst 18 months of the scheme, according to its architect David (nowLord) Young.

This time, however, banks aren't lending, people aren't spendingand public-sector cuts are destined to bite hard. Arguably, then,today's entrepreneurs have higher hurdles to clear than previousgenerations. But politicians still summon up the spirit of Britishentrepreneurialism: David Willetts, Minister for Universities andScience, last summer suggested unemployed graduates should considerstarting their own businesses. In September, Business SecretaryVince Cable made the same case when visiting Sheffield, calling forprivate investment to fill the space left by a retreating publicsector and claiming that most employment growth would come from"micro-companies". He later announced the formation of anEntrepreneurs' Forum, offering, well, advice. All the while,Regional Development Agencies are being wound down, and, accordingto a survey of small businesses by eBay in the autumn, a third ofSMEs (small and medium-sized enterprises) are refused finance bytheir banks.

As Niklas Zennstrom, co-founder of the internet- communicationscompany Skype, commented in Wired magazine, there's also a culturalbarrier to break through: "You have a lot of people with great ideaswho have what it takes to be great entrepreneurs, but their friendsand families are not encouraging them."

Like Sam Alison, Sue Acton worked in the financial sector untilher job disappeared. She set about seeking finance for her ethicalbodycare business Bubble & Balm, with The Body Shop an obvious rolemodel. "Even though I'd worked in finance, I had no background inthe industry to offer, no sales figures. 'We don't lend to start-ups,' was the message. I can see both sides: a bank's job is not totake risks with savers' money. But the criteria they apply don'tleave room for spotting potential successes."

Acton was fortunate in winning a 15,000 grant and having aredundancy payout. Unemployed students Rob and Mart Drake-Knightdidn't have that luxury. Their clothing business, Rapanui, wasstarted on a shoestring. "After leaving university, we struggled tofind work," says Rob. "We decided that if we couldn't find a job,why not make one? Mart and I started the business with 200 of oursavings each. We bought a box of T-shirts and sold them to friends,then we bought two boxes, then four and eight..."

Based on the Isle of Wight, which has one of the highest rates ofyouth unemployment in the UK, Rapanui is debt-free and, like thecotton used for its T-shirts, has grown organically. Rob Drake-Knight feels that grant culture is ill-considered: "Grants areavailable for ideas and 'getting the business off the ground', yetsupport for businesses already trading is slim pickings. When weneeded money a couple of years after we launched to fund the growthof our business, there was none available. Our advice toentrepreneurs is, instead of wasting time in the spaghetti of redtape for funding, pick up the phone and sell some more stuff.

"The Isle of Wight economy relies on tourism and there is a reallack of support for enterprise," he adds. "As a result, young peoplemove off the island to find work, there is less new business, lessgrowth and fewer jobs. It's a downward spiral that can only besolved by entrepreneurs starting new businesses, creating jobs andbuilding a robust economy - but banks don't lend youths money."

John Abbott and Simon Weatherall both had full-time jobs - aswell as young families - when they started Oobafit, a websiteoffering tailored fitness programmes and nutrition. It was findingthe time to develop the idea that was hard. But they had anincalculable advantage over entrepreneurs in previous recessions:technology. "We wouldn't have been able to do this five years ago,"says Abbott. "The internet enables you to reach a huge number ofpeople across the globe. You don't need to have an interview or evenpay much money to start a website, you just need an idea. Ourwebsite is based on open-source software that's free to use,connects with Tesco supermarket and is run from the same computersAmazon use, which we rent on a monthly basis."

So things are very different this time round: the internet hasopened the door to any would-be entrepreneur wanting to start abusiness on a shoestring - though it must be pointed out that whilethe companies here have outsourced some work to others (webdesigners, for example), Bubble & Balm, Oobafit and Singular remainsolo operators. Only Rapanui has actually created any new jobs.

Still, against adversity - redundancy, unemployment, working afull-time job while raising toddlers - the four young businesses onthese pages, each at different stages of growth, share theirrecession success stories. They are not venture capital-funded hi-tech start-ups or Apprentice-style chancers. They're "kitchen-table" entrepreneurs with two things in common: a good idea and hardwork. *

The moonlighters

John Abbott, 33, and Simon Weatherall, 29, Oobafit

Post-natal fitness classes brought Abbott, an IT specialist, andWeatherall together. The latter, a former Royal Marine who served inSierra Leone and Iraq and is now a fitness instructor, ran classesfor new mothers. "We talked about how you could replicate a personaltrainer and a nutritionist online and combine it with a socialnetwork to help people stay motivated as they trained," says Abbott."We wanted to build a website that could reach as many people aspossible, that was free, fun and simple to use. Oobafit has been aresponse to the recession, giving people a cheaper way to gethealthy than paying a gym 50 a month."

Oobafit launched a few weeks ago, but with both men having youngchildren and full-time jobs, it has been a challenge to get thisfar. "There've been a lot of late nights and weekends given up,"says Abbott. "In an ideal world we'd have done this earlier in ourlives." Weatherall has worked 18-hour days: "Some days I run 30miles with clients before getting home to see my little boy andwife. They go to bed and I start on Oobafit. Then I'm up at 5.30amto do it all again. I think my wife understands that I want to giveus all a better life."

The pair spent less than 1,000 on building the prototype website,which won them seed-funding from an investor. "The most valuablelesson we've learnt," says Abbott, "is that if you have an idea,just get on and do it. Get it out there in front of people so theycan tell you whether or not it's good."

The former marketing man

Sam Alison, 34, Singular Cycles

After leaving his management job in January 2010, Alison focusedfull-time on Singular Cycles, which supplies bike-frames he himselfhas designed to online customers and bike shops. "My fears were lessabout the economic environment than my ability to turn what had beena hobby into a viable company. I'd always had the safety net of aregular paycheck to fall back on; what I'd been doing had been well-received but staking your whole livelihood on that is a big step."

Alison's time has clearly been well spent; turnover in Singular'sfirst year of full-time business is around 300,000. "The extra timehas made a massive difference: I've spent it developing a dealernetwork, pursuing marketing opportunities and catching up withbookkeeping."

"Where we are now, in a global economy, you can have a very leanbusiness model with few overheads. Everything can be outsourced."But importing bike-frames incurs high costs for Alison: "The biggestdrain is the process by which VAT is assessed and collected. As soonas the frames arrive in the UK, I'm thousands of pounds out ofpocket at once.

"I try to focus on factors that are in my control. Singular hasbeen very satisfying, but I still have goals to grow further anddevelop new products. So it seems premature to call it a 'success'just yet. But the signs are good and no matter how big the companymay get, the best thing about it will always be seeing peopleenjoying riding my bikes."

The redundant City worker

Sue Acton, 38, Bubble & Balm

With the goal of creating Britain's first Fairtrade-certifiedbodycare products, Acton spent hours at her kitchen stove, mixingingredients. "I had no business angels, just a 15,000 grant and someredundancy money, so I couldn't afford to pay for someone to testthe products. The only way to do it was to learn to make themmyself. Getting up at 8am to work on Saturday is now the newnormal."

The result, Bubble & Balm, was launched in June 2009. "At 3am Iwas stirring products then later that day meeting journalists.Launching a premium bodycare brand is difficult at the best oftimes, never mind when everyone is cutting back. But I think thecrisis, with its focus on whether greed was the cause, has had apositive impact on ethical spending."

Acton made, marketed, sold and dispatched her products on herown: "I started out selling online and quickly went wholesale. I metthat demand just by working harder: I went from getting orders for1,000 units to orders for 20,000... and it takes three hours to makea batch of 100." Rolling out in Waitrose in June 2010, Acton hadjust a month to find the right manufacturer. "I'm told that Bubble &Balm has achieved more in 18 months than many companies achieve in10 years," she says. "But I'd be lying if I said I didn't lie awakeworrying about it. I knew the risks when I started. My parents wouldsay that I was always stubborn. I suspect that that, coupled with anaturally optimistic personality, helps."

The unemployed graduates

Rob Drake-Knight, 25, and Mart Drake-Knight, 24, Rapanui

"Mart and I were always entrepreneurial," says business-degreegraduate Rob Drake-Knight. "Our first venture was a wooden go-kartbusiness. Most children just make them and go down hills; we didthat, too, but we also sold them to friends and started a mini-craze on the Isle of Wight. At university, I ran a speed-datingbusiness and Mart worked as an eco-consultant selling on what helearnt in lectures."

Jobless and back on the Isle of Wight in 2008, the brothersspotted a gap in the market for fashionable eco-friendly clothing."You don't need a big idea to be an entrepreneur," says Rob, "but acan-do attitude is essential. We were buoyed up by the wildpossibility of actually making money by ourselves. You've just gotto believe."

In two years of trading, Rapanui has grown dramatically and nowemploys 12 people. "We broke even after our first year and havegrown at a steady 300 per cent year on year since, and hope to reacha turnover of 1m by 2012."

Earlier this year, the pair won at the Sustainable BusinessAwards, in part thanks to the "traceability" tool on their websitethat lets customers see where and how each item is made: "Everyorder from us is one less sweatshop T-shirt being bought," says Rob."There's no chance of putting our feet up anytime soon," adds Mart." Last year we would have been stoked to have 10 people at theoffice, but the hunger to improve is exactly the same as it was onday one."

The golden rules

'Have cash, do deals, be cheeky'

George Freeman started his bio-tech consultancy in the teeth ofthe 1992 recession. He gave up his job in November with just apromise of interest from a potential client and 7,000 cash - enoughto keep him going on cheese sandwiches for three months. "Everybodytold me I was mad but I knew I had to do it then or never," he says.

By December, Freeman had snared the client, taken his first feeand three months later had four clients and the business was flying.And Freeman, who spent the next 14 years advising bio-tech companieson their own start-ups, has three basic golden rules for everybudding entrepreneur: cash, cash and more cash; do deals witheveryone; and show a bit of cheek.

"You need a strategy, yes. You need a business plan, yes. Butmost of all you need to sell something, anything, to keep you goingto give you cash and cash-flow," he explains. "But you also have tobe cheeky and do deals. Get 10 per cent off the fax machine byoffering cash, or ask people who maybe don't have jobs to work foryou for nothing other than expenses and a cut if the business doeswell. That way you share the risk."

It worked for Freeman, who, after five years, saw turnover top1m. And it's a mantra that you hear from every self-made, successfulbusinessman, whether it's the smoothy Peter Jones of Dragons' Den orthe more bloody-minded Sir Alan Sugar. All of them say entrepreneursare not born but made through sheer hard work.

More than half the young people in this country say they want tostart a business - but only one in 20 actually does. We need more tohave a go; all new jobs are going to come from the private sectorand small companies provide most new jobs.

Ironically, taking a risk during hard times can lead to greatrewards. Most visionaries, from Steve Jobs of Apple (left) to BillGates of Microsoft, started out without money, in their case in thedepths of depression in the 1970s and early 1980s. Austerity forcesyou to pay as little as you can for goods and suppliers - and borrowas little as possible.

As Freeman says, if you can make it during these tough times, theonly way is up. He's now in government as MP for Mid-Norfolk, sowill be helping government and us on how best to help new technologystart-ups. What cheek.

Margareta Pagano, business editor of The Independent on Sunday