With fewer jobs available and more people feeling shut out of the labor market, many would-be 9-5ers chose to go out on their own.
Challenging economic times can encourage entrepreneurial capitalism, according to a recent study by the Ewing Marion Kauffman Foundation. More than half, or 51%, of the companies on the Fortune 500 list this year began during a recession or bear market or both, according to the study.
And while it may be difficult to get off the ground, some start-ups are flourishing in the current economic climate.
Julie Trade became her own boss after her husband was laid off in 2007. With a background in marketing, the former stay-at-home mom, 40, launched her own marketing communications business from a spare bedroom in Scottsdale, Ariz., drafting advertising and press materials for her clients.
Since her husband struggled for nearly a year to find another full-time job and they had a young baby, "I figured the best solution was to work from home."
Trade thought she could earn a little extra cash for the family while her husband searched for a new job. But as the recession worsened, her business began to take off.
"I thought I'd get a couple of clients to make ends meet while he was looking for work," she said. "But what happened was my business kind of went crazy."
Trade got up to speed on email and IM and learned about new marketing techniques, such as search engine optimization.
"I started to think about ways I could offer a variety of services, learn new technologies," she said. "I found ways to make myself appear larger than just a stay-at-home mom in a back bedroom."
Soon she was writing press releases and ads for established companies including British Telecom and Argent Software. "Companies that I never thought in a million years would need my services suddenly did. I was a cost effective source," she explained.
Now Trade logs 40 hours a week, mostly between the hours of 4:00 a.m. and 8:00 a.m. plus evenings and weekends, while her sons, ages 2 and 5, are asleep. "During the day I'm still a stay-at-home mom," Trade said.
That's a stay-at-home mom with a six-figure salary.
Trade estimates that she now makes twice what she did when she was working full-time before having children.
Stepping out on your ownThe worst job market in 26 years may be the perfect time to start a business, according to Tim Kane, a senior fellow in Research and Policy at the Kauffman Foundation.
"It's very easy to waste half a year on a job search," he said. "Whether it's a good time to start a business depends on your personal situation. It's a great time if you've always wanted to start a company and you are stuck in a job search."
Because of the increased flexibility in terms of scheduling and location, working for yourself is a particularly "viable option for women who want to work and raise kids," according to Victoria Colligan co-author of "Ladies Who Launch: Embracing Entrepreneurship and Creativity as a Lifestyle."
Thanks to tools like social media and email marketing, entrepreneurs can build relationships online and reach many prospective contacts and clients.
But before venturing out on your own, Colligan suggests "side launching" for starters. If you are already employed, "don't quit your day job," she said.
Last year Fresia Rodriguez, 32, side-launched Kingley&Posh, a plus-sized women's fashion label while she was still employed as a magazine journalist in D.C.
Rodriguez says the business is forecasting a profit after the fall season.The first collection, due this fall, will be represented in about a dozen boutiques nationwide.
"When you start a business it always takes longer than you think to become profitable," Colligan said. "Plan for at least 12-18 months for laying that foundation."
Also, be prepared for the hefty start up costs that are often required to get a business off the ground -- although marketing businesses like Trade's generally have lower overhead and less risk, she said.
For those with greater initial costs and little funding, consider creative ways to finance your venture, Colligan suggested. "People will work with you in exchange for revenue sharing, partnerships, bartering and trade."
Rodriguez, for example, offered up her writing skills in exchange for accounting services. She also negotiated for a custom Web site and printing services.
"Creativity is at an all-time high," Colligan said. When it comes to the traditional rules of starting a business, "people are willing to think out of the box."
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