Image: Roger Ochoa
John Makely  /
Roger Ochoa, the owner and director of a Chyten Educational Services franchise in Upper Montclair, N.J., stands in his new space which will host tutors and their students.
By Allison Linn Senior writer
updated 1/19/2010 9:59:38 AM ET 2010-01-19T14:59:38

Andy Owen never thought he’d go into business for himself.

“I was dragged in kicking and screaming,” he said. “I like working for other people.”

Things changed when he was laid off from his job at a Michigan school district in June 2008 amid the nation's worst recession in decades. He quickly found that he was unable to land another job that paid enough to afford child care for the baby he and his wife were expecting.

A former colleague offered to lend him some computer and video equipment.  Owen, who had a background in videography, used it to produce a couple of corporate videos. That eventually led to work as a wedding videographer.

These days, the 27-year-old runs Owen Video out of his home in Okemos, Mich., primarily shooting weddings on the weekends and caring for his 1-year-old daughter most weekdays.

“I love it,” Owen said. “I never thought I would, but I love it.”

With unemployment hovering at 10 percent and the economy still shedding jobs, many would-be employees have concluded that the best way forward is to go into business for themselves, whether they want to or not.

Call them accidental entrepreneurs. Some find themselves surprised to discover they enjoy the freedom and fulfillment of being their own boss. But many are being overwhelmed by the  challenge of becoming their own HR person, billing department, construction foreman and IT expert.

“It’s a fun and exciting never-ending stress ball,” said Michael Fisher, who started The Estate Services Group an estate-planning firm in Orange, Calif., after his previous employer went out of business.

About 9.14 million Americans or about 6 percent of the work force described themselves as self-employed as of December, according to the Bureau of Labor Statistics. That’s about 2.5 percent more than a year earlier but slightly less than when the recession began in December of 2007.

The decline suggests that business failures have outpaced new business startups during the recession, although the tide seems to be turning as the economy emerges from the downturn.

Recession provides opportunity
Roger Ochoa was working two jobs, sometimes clocking in as many as 70 hours a week, when the full force of the recession hit him.

In March, Ochoa was laid off as an editor with an academic book publisher. Ironically he had just spent more than two years editing a textbook on economics. A couple of months later, he learned that his second, part-time job as a newspaper editor would be moving to a different newsroom more than an hour away. His last day there was June 1.

Ochoa, who lives in Ledgewood, N.J., went through the motions of looking for a job but  wondered if perhaps he would be happier escaping the doldrums of office life.

“The recession provided that opportunity,” Ochoa said.

He recently opened the doors to his Upper Montclair, N.J., franchise of the tutoring service Chyten Educational Services. His first client is scheduled for later this month.

Ochoa said it was hard initially to convince his wife that starting a business was the right decision for them and their 3-year-old twins. One key aspect of his plan was that his wife’s job in the public school system would allow the couple some financial stability and provide them with health care benefits.

The stakes are high. He has put a substantial financial investment into the business, in part to build out and furnish his office space.

“Getting that done was the most stressful thing I’ve ever had to do,” he said.

Ochoa also had to hire and train his staff of tutors, learn how to manage finances and become a salesman.

He expects it will take several years to get back to his previous level of earnings. In the meantime, his family has cut back on everything from coffee at Dunkin’ Donuts to groceries.

“It’s trial by fire, but it’s an exhilarating experience,” he said.

Motivated by job losses
Surprisingly, the odds of success for a business appear to have little relation to whether its founder chose to pursue that path or was forced into it a job loss, said Bill Dunkelberg, chief economist for the National Federation of Independent Business and one author of an extensive, multiyear study of thousands of independent businesses.

The study found that three years after forming a business most owners did not regret the decision. But about half also said it was not as financially lucrative as they had projected.

Once the economy improves, Dunkelberg expects that some will stick with their new businesses, but others will find they like working for someone else better after all.

“When an opportunity comes to just work a 9-5, you know, and go home and drink a beer and watch the football game, hey, they’ll take it again,” he said. “(Owning a business) is not for everybody.”

Owen, the videographer, did find that there were advantages to working for himself — such as the ability to be at home with his daughter, fitting work in at naptime. He also was surprised to find how much he enjoyed shooting weddings.

But there are challenges. The family is trying to sell their 720-square foot house and buy a larger one, but in the meantime Owen's bedroom doubles as his office. That means his evening work hours end when his wife decides to go to sleep.

He also has found the sales part of the job to be uncomfortable, although he’s been pleasantly surprised by how much free social networking tools such as Twitter have helped him.

The job doesn’t yet pay what he was making doing multimedia work for the public schools, but he is optimistic. Meanwhile, he’s grateful for his wife’s salary and benefits as a university financial aid counselor.

Still confident
Fisher decided to start his estate planning business two years ago because he didn’t think he could get a similar job to the one he had lost.

“I’ve been doing what I’ve been doing for a long time, so I felt confident giving it a try — and I still feel confident even though I’m not getting paid,” Fisher said.

Although he managed staff in his previous job, he found that being the business owner required him to take on other responsibilities he’d never had before, from choosing a phone system to figuring out where to buy printing paper.

“It’s just tremendously more stressful because you’re not just thinking about your position or function or duties — you’re thinking about every single aspect of running or keeping your business afloat,” he said.

The economy also made it difficult for him and his small staff to drum up business and land new clients, even though he’d started the business with a substantial client base.

He has had to start working nights and weekends, and the financial investment in the business means that his lifestyle has taken a considerable hit. He traded in his Porsche and Mercedes for a Honda Civic and sold his Jeep, Harley and other “toys.” He and his wife rarely eat out or go on vacation.

Still, Fisher has found he likes the control of running his own business, and in the end he  believes it will pay off financially as well.

“I want to have a newer Porsche and a better Mercedes and live higher on the hill,” he said with a laugh.

© 2013 Reprints


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%