Annette Walter was chief operating officer of a fast-growing Baltimore real estate company. Her husband, Shawn, a former construction project manager, had launched a successful career in sales.
But in March, the Hunt Valley, Md., couple walked away from the corporate world of fixed schedules and long commutes and went into business for themselves. They bought a 75-year-old company in Baltimore that distributes wooden and plastic pallets. The Walters will run the business from their home.
“This decision was to benefit our lifestyle,” Annette Walter said. “Shawn and I had realized the opportunity was to create your workplace, not have your work create you. I wanted something that had a little bit more autonomy. And we wanted something ... we could build and grow for our family.”
At a time when workers want greater balance between work and personal lives, some professionals find their perfect job by buying into it. Even in a rocky economy, the timing can be right to buy a business, invest in a franchise or start a company from scratch, experts say, especially for those who have built experience and financial resources working for others and can make the jump.
Some professionals turn to entrepreneurship after becoming frustrated with the job market and what they consider a lack of quality jobs, said Bill Clark, a senior managing partner of the business coaching firm Clark Leadership Group in Baltimore.
“One way to beat that is to do something on your own,” Clark said. “This trend is going to grow. It will continue as more and more people in the job market are unable to find employment, particularly those who are willing to take risks and those comfortable in being creative and finding different ways that they can earn a living. The job market five years ago was pretty plentiful, and there wasn’t much reason to risk. Today, it’s a whole different ball game.”
It’s still not the best time to start a new business. Demand for goods and services remains tepid in the current economy, said Heidi Shierholz, a labor economist at the Economic Policy Institute in Washington.
“That doesn’t bode well for somebody who wants to start their own business,” she said.
Business startups, which tend to rise and fall with the cycle of the overall economy, have fallen steadily since peaking in mid-2006, when more than 650,000 establishments were less than a year old, according to the U.S. Department of Labor.
Since the recession started in December 2007, business startups have seen the steepest decline since the early 1990s. The number of new businesses in the year ending March 2010, just over 500,000, was lower than in any year since 1994, when the Bureau of Labor Statistics began tracking entrepreneurship.
Regardless of whether the economy is strong or weak, entrepreneurship is not for everyone, Clark said.
“It requires being … comfortable with taking risk” and approaching business creatively, he said. “If I said to you, ‘I know a great business to get into, and it will cost you $50,000,’ and you look at your home and say, ‘I have $50,000 of equity,’ a lot of people would say, ‘No, I won’t touch that.’ Others would say, ‘It looks like a good opportunity; I’ll take the risk.’ Everyone approaches this differently.”
Alan Klug, a Baltimore native with an accounting background, had worked in the consulting branch of KPMG for six years, traveling the East Coast for his job, when he ran across an ad for a 1-800-Got-Junk franchise and found no one had claimed the Baltimore territory. It appealed to him because he could stay in Baltimore, where he and his wife wanted to raise a family, rather than relocating to New York or Boston, and cut back on travel. Yet he struggled with the thought of leaving the corporate world.
“I liked the polish that came along with a corporate environment, but as the job search unfolded, the only way to stay in Baltimore and raise a family here without traveling was to start a business of some sort,” he said. In the Got-Junk franchise, he saw “a huge opportunity. These guys have taken this down-and-dirty, fragmented business and polished it and professionalized it.”
He also felt the timing was right. He could afford it without taking out loans or finding investors, and he and his wife were expecting their first child. He invested nearly $60,000, including $32,000 for part of the Baltimore territory and working capital for trucks, uniforms and advertising.