According to Edwin Lee Kan-hing, chief executive of Hong Kong Business Intermediary, a broking firm specialising in small ventures, transactions increased by more than 50 per cent compared to the same time last year. There was a similar rise in inquiries about starting a business.

'Our business is linked directly to the rate of unemployment: the higher it gets, the more business there is for us,' Lee says. 'You're more likely to be successful if you start a business at a time like this, because costs such as rent and manpower are much lower. It's better to stick to consumer products that are less durable and that people can't live without.'

Luxury handbags don't quite fit into that category but, despite past failures, Mak is optimistic about his IconLady rental service. The business has recorded a steady rise in profits, especially during the festive periods of Christmas and Valentine's Day. It has more than 2,000 members, 80 per cent of whom are so-called office ladies.

'More women want to try different brands and styles, and some even regard luxury bags as a necessity. Our service will appeal to those who want to keep up appearances, or simply want to impress without breaking the bank,' he says. 'I hope it will become as widely accepted as in Japan and in western countries.'

Its third-floor premises in Causeway Bay were chosen for privacy and convenience.

'We picked a discreet location because we think some customers might get embarrassed,' Mak says.

Other reservations, however, have been harder to overcome.

'People still have qualms about using handbags that keep changing hands,' says Mak. 'There were similar misgivings about [buying] second-hand luxury bags about 10 years ago, but that attitude has changed. It takes time. We hope to generate some good word of mouth, and don't mind more competition because it helps nurture more of an open-minded outlook.'

Wendy Law, 31, is among the converts. 'It's just like new,' says the sales assistant, who initially had doubts about the condition of rented bags. 'I was worried that they might charge me when there's a little wear and tear, but they've been very understanding about it.'

Law has several luxury bags of her own but says renting makes it affordable for her to try other brands and more frivolous styles. 'It makes more sense to rent those fancy clutches for special occasions. My money is more wisely spent on practical styles,' she says.

IconLady now rents out about 150 bags each month, but that doesn't bring in enough revenue for the business, especially in the low season. Mak, who is general manager, adds to that with sales of parallel imports and items placed on consignment by customers for sale, lease or exchange.

'This helps offset the risks I take with my rental service,' he says.

In Yuen Long, former marketing executive Ronald Ng Ka-chun persuaded his mother, Joyce Lee Fung-kiu, to turn her hobby of cooking special meals at the family's pet hotel into a homemade pet food operation two months ago.

'I wanted to give it a go because we received good feedback from neighbours about our food. We target people who really care about the welfare of their pets,' says Ng, 31, who lost his job in December.

'[Being laid off] might be a blessing in disguise because I can focus on starting my own business. I've always wanted to do it,' he says.

Describing the fare as 'all-natural, MSG- and preservative-free', the mother and son team hope Joyce Pets Kitchen gains popularity among health-conscious dog and cat lovers, especially after last year's tainted pet food scandal.

'I've seen many pets suffer from diabetes and other kidney and liver problems as a result of constant consumption of manufactured pet food,' says Lee. 'Besides, it's inhumane to feed them the same food over and over again, they deserve food that is fresh, nutritious and tasty. How would you feel if you had to eat instant noodles and canned food every day?'

However, veterinarian Eric Lai Cheong-sang has reservations about the homemade fare. 'It's easy to disparage commercial pet food, but there's quality stuff too. I've raised about 30 dogs over the years; all ate commercial pet food and almost all lived to be over 16,' Lai says. 'I'm more concerned about quality control because you need to be a nutritionist to make pet food. It's better to consult with a vet before feeding your pet homemade food.'

An unusual concept or service can help new businesses raise their profile, but no matter how novel and creative, no venture is going make money unless it's something people really need, says business broker Edwin Lee. 'Being creative without being realistic is a recipe for disaster.'

That's why people stick to sectors that are relatively resilient in hard times, Lee says, including catering, which accounts for 40 per cent of new ventures, and education, which makes up 30 per cent.

In December, Ophelia Lam Pak-fan, 24, quit her job selling software and pooled her savings and loans from her family to buy a tutorial centre business in Hung Hom for HK$300,000.

'I was under a lot of pressure because big companies stopped buying software systems and my performance suffered,' says Lam, who graduated two years ago.

Her tuition centre venture was a considered move. Lam had some experience in the business, having worked as a tutor. 'I did some research and knew there was a considerable presence of middle-class families and prestigious schools in this area,' she says.

Although some students left with the previous owner, Lam has managed to cover her basic costs so far and expects to recover the investment in two years. 'It's tough running a business on your own - you have to do everything from cleaning to bookkeeping to teaching kids. I hope things will get better after I introduce some new classes next month,' she says.

Low-cost online businesses can have an advantage in the downturn, particularly those that use shopping sites to showcase their products and target mostly younger customers.

When homeware designer Christine Wong Wai-ting, 24, quit her job last October, she teamed up with two unemployed friends to launch Give Box, an online shop specialising in floral arrangements with a twist - for just HK$3,000.

'We just thought why not try something that can use our different talents,' she says.

The trio more than doubled their investment in the first month. It was a case of offering the right products at the right time, she says. Their gift sets featuring silk flowers and teddy bears were just the thing for cash-strapped students looking for inexpensive graduation presents.

'They don't want fresh flowers because photo sessions can take days. We also put a lot of effort into designing products and selling them at a lower price to stand out from competitors,' Wong says. 'The downturn helped us because everyone was trying to save.'

Still, Wong has returned to the security of a full-time job. 'The income is too unstable - we were only busy during the graduation season,' she says. 'There are still many things that I have to learn [about running a business]. I need more work experience to pull it off.'

And a little bit of luck.