By: Sarah E. Needleman
March 21, 2010
In January, David Sullivan was let go from an insurance company. Fourteen days later he started working again -- for himself.
"I always thought I'd be working for somebody else until I retired," says Mr. Sullivan, who has one client so far -- a neighbor he's advising for free to get a referral under his belt. "I'm doing this because I have to."
No Other Choice
Mr. Sullivan is an accidental entrepreneur. And he's not alone.
Roughly 7% of workers in the U.S. today are self-employed, according to the Bureau of Labor Statistics. And many say they landed in this position due to an unexpected financial hardship such as a job loss or salary reduction. They're now learning to make ends meet without a steady paycheck, employer-subsidized health benefits and other perks that come with working for someone else.
In this column, we'll look at some of their stories and what others can learn from their setbacks and successes.
Gina Cozza was laid off in February 2009 from an office-manager job. Afterward, she was only able to find part-time work near her Spokane, Wash., home.
But being geographically limited, it turned out, is what Ms. Cozza says inspired her to try her hand at a virtual-assistant business.
Today, she has clients in Florida, California, Colorado, Michigan and Seattle that she services remotely. Ms. Cozza says she's earning close to 70% of what she made working full time.
For Jenine Lepera Izzi of New York, losing her sales position at an architecture firm in September 2008 was just the push she needed to pursue her dream of becoming an entrepreneur. "It's scary to give up the benefits and the salary of a full-time job," says Ms. Lepera Izzi.
Still, she says it became clear that because of the bad economy it was an ideal time to launch the sales-training business she'd envisioned. "When budgets get slashed and competition becomes fierce, you really have to rely on your sales skills."
She tapped professional contacts and landed a meeting with the head of the real-estate program at New York University. The school became the first of the six clients she has to date.
A 20% Failure Rate
Of course, starting a business -- and keeping it afloat -- isn't easy. On average, 20% of start-ups fail within their first year, according to the Ewing Marion Kauffman Foundation, a nonprofit focused on entrepreneurship.
Jamie Fracaro of Oakland Park, Fla., has been struggling to build an online lingerie business. She created a Web site last year, but wasn't earning enough working odd jobs to promote it. So she set up a store on Etsy.com, hoping to tap into the online marketplace's 4.4 million members. Recently, she became unemployed and is now focusing just on her online venture. But, so far, she hasn't had any sales.
"I would love for my business to take off because right now there aren't many jobs to choose from," Ms. Fracaro says.