Two years ago, Peter Thompson lost his job as a band director in the Del Valle, Texas, school district.
Finding a new one was tough: More than a dozen interviews yielded nothing, despite employers repeatedly telling him that he was a top candidate.
Times were hard, “especially since I was a music teacher,” he said. “Those are the first ones to go.”
Eventually, he decided to try entrepreneurship. Now Thompson is raising money to start a video game lounge/sandwich shop in downtown San Marcos, Texas.
He’s betting big, planning to raise about $40,000 by cashing out his state retirement and getting money from family members and others. He hopes to raise another $100,000 through a nonprofit lender such as PeopleFund and open for business later this year.
“I guess it was the ability to be my own boss, to make my own decisions,” he said, explaining the allure of being an entrepreneur, “the whole idea of knowing that my fate was in my own hands, rather than based on the decisions of somebody else.”
In the wake of the recession, more and more people are coming to a similar conclusion, economists say.
A March report from the Ewing Marion Kauffman Foundation shows that U.S. entrepreneurship levels, while dipping during 2011, are still above pre-recession levels.
The report shows that 0.32 percent of adults created a business per month in 2011, which comes to about 543,000 new businesses created each month during the year. That’s a 5.9 percent drop from 2010 but still among the highest entrepreneurship rates over the past 16 years.
“The Great Recession has pushed many individuals into business ownership due to high unemployment rates,” said Robert Litan, vice president of research and policy at the Kauffman Foundation. “However, economic uncertainty likely has made them more cautious, and they prefer to start sole proprietorships rather than more costly employer firms.”
Nearly eight years ago, Thomas Pedersen started selling chocolate-covered cocoa beans at the downtown Austin farmers market. Pedersen, who had worked in the press office of the state comptroller’s office, said he’d always wanted to own his own business.
“People are turning away from corporate America, or they’re losing their jobs, or they’re pursuing a passion like I am, and (they’re) finding, ‘Hey, I’ll start something small,’ ” he said, pointing to the local increase in food trailers.
Pedersen sold out of his products the first day. Eight years later, he and his wife run the business and support themselves, selling to grocers as well as to individuals through the farmers market and their website.
Pedersen’s business predates the recession, but he said he also sees a larger trend of entrepreneurship.
“I think there are a lot of forces at work,” he said. “One is that the economy has changed. The other is the Internet. Another is that young people are seeing if they stay in a business, they may not be rewarded. I think they’re more willing to undertake ventures on their own.”
The growth of technology and online distribution platforms such as Amazon and the e-commerce site Etsy also lower the bars to entry for would-be entrepreneurs, said Jon Hockenyos, president of the Austin economic consulting firm TXP.
“On one hand, the door opens a little more easily; on the other, when you walk through the door, it’s a little more crowded in there,” he said.
That can also mean that people move in and out of entrepreneurship more quickly, Hockenyos said. For example, a laid-off petroleum worker might start his own consulting business but then return to a salaried job for benefits such as health insurance.
Overall, Hockenyos and other economists point to a cultural shift away from working at a single company for an entire career.
“I think that the expectation that you’re going to go work at the company store and be there for 30 years and retire with a gold watch is pretty much gone,” Hockenyos said. “So people change jobs more frequently than they have in the past; they’re more comfortable with a more fluid work environment than they used to be.”
Hockenyos pointed to Austin’s burgeoning food trailer scene as evidence of lower-cost startups. Although those trailers cost money, they’re a fraction of the expense of a brick-and-mortar store, he said.
Source: MCT Services