|
|
The Department of Labor backs up Sud's claim, predicting that the No.1 employer by 2010 will be "self-employment." Approximately, 10.5 million workers were self-employed in 2007, and that number is expected to jump markedly, according to the DOL.
Self-owned businesses now make up about 80 percent of the GDP. A Merrill Lynch New Retirement Survey conducted in 2005 revealed that Baby boomers would reinvent retirement with many starting news businesses in their later years.
The point is more people who have lost jobs or are uncertain about their futures, are entering or contemplating self-employment in a down economy. Of course, being self-employed comes with a risk barrier, but it's alluring to be your boss at your business, to which you can bring your passion and commitment.
Consider Emily Worden, a Fairfield University MBA graduate, who bypassed the corporate world to launch her own business that was more in line with her passion - creating handbags and accessories.
Worden started Elemental Threads (www.elementalthreads.com) in 2008, an online business that offers handbags that customers design on the site, selecting sizes, fabric options, linings and zippers. She has grown the business enough that she can start paying herself, and is looking for part-time seamstresses to help her sew the bags that customers design.
"I spent about two years planning my business," Worden said. "Now I actually think this could go somewhere. If it fails I'll move onto another thing, another start up, not an organization. I like the idea of starting something new and fresh and work from the ground up. That's really exciting."
Worden, 28, sees her generation spawning a record number of entrepreneurs, who have seen their parents lose job security working for larger companies. "The economy should have scared me away, but it didn't," she said. "I saved enough money for living expenses while the business grows.
Sud identified two basic types of entrepreneurs who are setting the economic pace:
1. Those who are opportunity driven;
2. Necessity driven
Opportunity driven entrepreneurs recognize needs and start businesses to fill them. Necessity driven entrepreneurs face unemployment and lack of job security and opt for self-employment to earn a living. "The important thing is both types of entrepreneurs create jobs," Sud said. "Their businesses create a trickle down effect throughout the economy."
Sud, an entrepreneur who has started 20 businesses, noted that many recent college graduates are starting businesses because their job prospects are poor. "The employment landscape is changing," Worden said. "I meet plenty of people around my age or younger who are starting businesses. So many are out of work who prefer to work for themselves."
Of course, entrepreneurship is risky. More than 80 percent of new businesses fail in less than five years. The biggest challenge is having a concrete business plan and the financial backing to make it successful.
In Sud's opinion, businesses fail, not the individuals. In many cases, entrepreneurs can benefit from failed business experiences and move onto other ventures. "Sometimes, there's not a market at a particular time [for entrepreneurs]," Sud said. "They can use what they've learned if they failed and start something new. Entrepreneurs are always perpetually innovating."
Finding capital is always a challenge for entrepreneurs, especially in a tight market when banks are reluctant to loan. Jeff Roseman, an adjunct professor of Entrepreneurship and owner of two jewelry stores, recommends that entrepreneurs do their homework before they leap.
"The statistics are stacked against entrepreneurs," Roseman said. "You can't go into business under capitalized and without a business plan. It's critical to do your homework."
Sud is confident that the economy will continue to improve and entrepreneurs will be in the middle of the economic recovery.
"Entrepreneurs are the bread and butter of the economy," he said. "The recovery will not happen overnight, but it will start with entrepreneurs. Small companies drive this economy; they always have. Despite the challenges, there are many opportunities out there for entrepreneurs."
