[Allison Bliss interviewed for marketing expertise in this article]

"Sweet Opportunity" - When job market gets weak, entrepreneurship thrives.
By Janet Wells
Special to the San Francisco Chronicle
January 14, 2001

Workers who missed the job gravy train – the one promising signing bonuses, stratospheric salaries, plush perks – may be jumping one a new career trend for 2001: self-employment.

While a sizzling market may seem like an ideal time for a surge of entrepreneurship startups, more people start businesses when the economy is tanking, according to recent market research.

“There us ore employment opportunity during a good economy,” said Sharon Miller, chief executive officer of the Renaissance Entrepreneurship Center in San Francisco. “When there are fewer job opportunities, people are more willing to take the risk to follow their dreams.”

With the economy’s 2.2 percent growth from July through September marking a four-year low for quarterly growth, along with a record 10,459 layoffs in the dotcom industry alone in December, the employment picture is far less rosy than a year ago. The Bay Area could lose more than 23,000 jobs in the next two years, according to University of California at Berkeley forecast released in early January.

During the last recession from, July 1990 through February 1991, the percentage of discharged managers and executives starting their own firms averaged 17 percent, while in the last three quarters on 2000 – perhaps the economy’s pinnacle – the percentage starting businesses averaged 6.7 percent and 8.2 percent respectively, according to a quarterly survey of 3,000 former employees conducted by Challenger, Gray & Christmas, a Chicago outsourcing firm.

Overall, the number of self-employed in the United States fell from 9 million in 1994 to 8.8 million in 1999, according to government employment data.
“During 2000, the market was so hot, many people who might have started a business decided to defer those plans because of money or security,” said John Challenger, the company’s chief executive officer. “There are people out there who are now looking to restart those plans.”

A sluggish economy can mean higher risk and slower sales for startups. Nevertheless, said Miller, “It’s a wonderful time to start your own business. The economy is still so strong and people are spending money.”

Miller expects to see increased interest in the center’s business planning courses, which, since 1985, have helped wannabe owners tap into their entrepreneurial talents and start businesses that range from jewelry making and massage therapy to high-tech consulting.

Lori Shannon opened her women’s exercise equipment and clothing store, See Jane Run, in San Francisco in April, after years of working in high-tech management.
“I had a good job. But I wasn’t going to be able to go much further up in a male-dominated business,” she said.
An avid runner and bicyclist, the 35-year old Shannon wanted to turn her recreational passions into a career path. But before jumping into the retail world, Shannon invested $500 in the Renaissance Center’s 14-week business planning course.

“It was awesome. It forced me to write my business plan, and think about every aspect of the business before I implemented it,” she said.

At the beginning of the course, Shannon’s intention was to open a bike shop for women. “The class turned the business into what it is. I realized I needed to not do hardware. It takes a lot of money to do bikes. It’s a much bigger investment than jog bras.”

With $12,00 in savings, Shannon renovated storefront space in Noe Valley, and relied on extended credit terms to bring in inventory. While she still pulls only enough salary to cover rent and food, See Jane Run has several employees, and the store’s sales have been growing steadily. December’s gross of $60,000 far eclipsed Shannon’s best month to date: $42,000 in October.

Shannon, in fact, had far less difficulty with the financial picture than with the personal transition from management to small-business owner.

“After the second week, when I was lacing up shoes, it hit me hard that I was servicing people. I definitely

was on a different level of job than as a strategic manager,” she said.

Shannon eventually realized that selling shoes was a necessary part of creating a women’s sports community around her store. The upside of the business is sponsoring races, a running team and a weekly group run. And best of all, Shannon said, she gets to wear shorts and sneakers to work – something she could never do in management.

Many people starting their first business are in denial – about money, about how much work it will be, about whether it’s really the right fit for them, said Allison Bliss, a business and marketing consultant in San Francisco.

“One of the most common mistakes I see in people starting a business is that we are in denial about money. Big time. I have clients who came from high-level financial institutions who are in denial about how much money they are making or how much it will take to keep the business going,” she said.

Inadequate capital is probably the No. 1 reason leading to the daunting Small Business Administration statistic that 50 percent of all businesses in the U.S. fail within the first four years.

But many small businesses – particularly consulting services – take very little startup and maintenance capital, Bliss said. With a computer, a phone and corner desk at home – along with focused planning and market research – beating the odds isn’t a Herculean task.

“I see fewer and fewer businesses folding these days, because there is so much support for people,” she added. “There are small-business micro loans, programs, services, affordable classes where people can learn about bookkeeping, marketing management. There are good books and mentoring programs.”

For disenchanted – or unemployed – workers in the information technology industry, there is a wide range of startup possibilities, Bliss said.

“If you have a job in a corporation, it’s likely that job is something that’s needed in a lot of businesses,” she said. “Jump from that job and repackage your skills. Instead of doing it for someone else, you can do it for yourself.”

Bliss offers a business startup package for $840 that includes seven hours of consulting, during which Bliss produces a simplified business plan for her client, She also works on an hourly basis, with clients establishing regular check-in sessions.

“They call me their marketing therapist,” Bliss said. “People get way off track and start making incorrect assumptions – like spending $5,000 on a brochure will bring business in. I help them stay on budget so they will actually reach their goal.”

David Schecter hired a business consultant who helped him figure out that the job he wanted wasn’t out there – he’d have to create it himself.

While working for years as a programmer and systems analyst for Pacific Bell, the 46-year-old San Franciscan became interested in the methodology of software development, and the systems of management and organization.

“I learned a tremendous amount through Pac Bell,” said Schecter. But every time he pursued a project that used his new skills, “it would get canceled in the middle.”

Schecter set out on his own late last year, offering consulting services as a “social architect,” designing “structures that enable people to work together and cooperate together,” he said.

David Schecter Consulting already has its second client – working with the nonprofit Groundswell network to design a network of support teams in low-income communities throughout California.

Schecter keeps his overhead low – working at home on a laptop and via e-mail. He’s also keeping his part-time job as a teacher’s aide at Spring Valley Elementary School in San Francisco until the business “takes off,” he said.

The slowing economy might mean a scarcity of clients, but for Schecter, not starting his own business was a bigger risk.

“By trying to fit my round self into the square pegs of the job world, I was making myself very miserable,” he said. “I feel fully alive when I do this work in a way I never have when working at a job.”

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