It was possible to have private businesses before 1990 but only in very limited ways. Some countries like Poland and Hungary allowed small shops or crafts. Yugoslavia was more relaxed. In the Soviet Union things were mostly state controlled until 1988 when they introduced the law on cooperatives. That was the first real step toward legal private enterprise.

But a lot of business actually happened in the grey or black market. People fixed shoes, sewed clothes, sold stuff under the table. Some estimates say the shadow economy made up almost half of personal income in the USSR by the late 80s. So people already had experience, just not legally.

After the fall of communism, entrepreneurship exploded because people had to survive. Factories closed, inflation was crazy, salaries didn’t come. So everyone started selling something.

Where did the money come from? Many became "shuttle traders". They would take a train to Turkey, China, or Poland, buy cheap clothes or electronics, and sell them at home. That was the most common start.

Bigger money came from privatization. In Russia especially, state factories and resources were sold off. Some were auctioned, some were given through vouchers. The loans for shares scheme in the mid 90s created the oligarchs. People with connections got the best assets for almost nothing.

Foreign money helped too. Poland had joint ventures with Western diaspora as early as 1976. Hungary and Czechia sold companies to Western investors.

And then there were the red directors, former communist managers who used their connections to grab state property. Or people who already ran underground businesses just went legit.