The day – They left corporate America to be their own boss. That’s how it goes.
Many businesses born during the pandemic are now struggling to survive or grow.
Rising inflation, supply chain issues and labor shortages are expected to continue at least in the near term, making it harder for small businesses to succeed and hurting prospects for historic new business numbers launched in 2021.
According to the Census Bureau, some 5.4 million new business applications were filed in 2021. Of businesses launched in 2020, 78% — or about 4 in 5 establishments — are still in business, according to the Ewing Marion Kauffman Foundation, a Kansas City, Mo., nonprofit organization that studies entrepreneurship.
The pandemic has accelerated the new business boom in two ways, says Ken Szymusiak, chief executive of the Burgess Institute for Entrepreneurship & Innovation at Michigan State University.
First, entrepreneurs saw opportunities to serve millions of people working and learning from home.
Second, a historic number of people quit their jobs in 2021. Many people who were downsized by their business or didn’t want to return to the office started their own businesses out of economic necessity. Some 30% of new businesses in 2020 were created out of necessity, compared to 13% in 2019, the Kauffman Foundation found.
Experts and academics offer this advice to budding entrepreneurs: don’t give up. “There are always ups and downs,” Szymusiak says. “If you’ve lost your passion or reached the point where you can’t handle the financial repercussions, it’s time to ask some tough questions about the pursuit,” he says.
Gallup discovered that the desire for independence, the ability to manage risk, self-confidence and a sense of determination are among the main characteristics of successful entrepreneurs. These traits — the same ones that compel someone to start a business — can be exploited when the startup is struggling to survive or grow, says Justin Lall, director of strategic partnerships at Gallup.
To understand how new entrepreneurs stay motivated and build their businesses, we spoke to three people who quit their jobs to go freelance, starting a cooking show, an interior decorating business and a board game company. .
One earns much more than he earned at his corporate job. The second is breaking out in a big way on Etsy and through partnerships with companies like Target. The third company has yet to fully take off. Their experiences show how an uncertain economy can defy the thrill of being your own boss.
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Former job: Film sales and distribution for the Walt Disney Co.
New adventure: Tasting History, a cooking channel on YouTube
Q: Where did the idea for Tasting History come from?
A: I always brought historic food to the office. At a company Christmas party in 2019, I brought a Medieval Elderflower Cheesecake. A colleague said to me, “Hey, you should put this on YouTube.” I released my first video at the end of February 2020.
Q: When did Tasting History become a full-time gig?
A: After the pandemic hit, I was put on leave. Nobody went to the cinema anymore. But I knew I was throwing the chain at the right time. Everyone was at home, and there was room to grow there. My start-up costs were pretty low – around $2,000 for a camera, tripod, ring light, and microphone. I had rather immediate success, reaching 150,000 subscribers in just four months. By April 2020, the channel had all but replaced my earnings at Disney. When the company asked me to come back in 2021, I decided to focus on the channel and made a video called “I Quit”.
Q: How do you earn money?
A: About four months after the channel launched, a company called Curiosity Stream reached out and wanted to sponsor the channel. I had no idea what to charge. So I decided to ask for a certain amount – I thought it was a lot – and they said OK eagerly. It is clear that my amount was not correct. I called a friend who was an agent and asked for help in negotiating. She was able to help me with contracts and see pitfalls that I hadn’t seen coming. Even though my agent takes some of what I report, his 10% discount was multiplied by a hundred in one month. Now I have over a million subscribers and I’m full of sponsors.
Q: Are you profitable?
A: I make way more than I made at Disney. I never would have guessed that.
Q: What’s the next step?
A: All of that can go away from week to week — there’s always that fear. What happens if YouTube changes its search algorithm or the way it shares its ad revenue? My strategy is to sublimate YouTube. I have a cookbook in the works. I’m thinking of switching to podcasts. I’m just starting to grow on Instagram and Twitter. If something happens with YouTube, all my eggs aren’t in one basket.
— Seek revenue from sponsors and advertisers; hire someone to help you with negotiations and contracts.
— Diversify your offerings and delivery platforms to broaden your base and protect yourself from slowdowns.
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Cedar Rapids, Iowa
Former job: account manager at a commercial design company
New adventure: Candice Luter Art + Interiors
Q: How did you discover your passion?
A: In 2015, I came across an ad for a local farmers market. I had never recycled anything – where you take old furniture and decor and upgrade it – but I had seen it on Pinterest. I bought power tools and asked for help using them. I started recycling everything I could. A month later, I thought I could really do something with it.
Q: So you were able to work full time and run a business?
A: It was tough. With this side job, I answered emails and calls from the bathroom and in the car. Then the pandemic hit and I was laid off. I thought it would be for a month or two. But they said, “We can’t take you back. When you’re used to stability and there’s no more stability, it’s hard. I was unemployed. But I thought, “OK, my God, you gave me two hands.”
Q: When did business really take off?
A: I already had a listing on Etsy. At the start of the pandemic, many people were working from home and wanted artwork for their Zoom backgrounds or tackling to-do lists. I tripled my sales the first year of the pandemic, which floored me. Last August, Etsy named me Artist of the Year or something. Many businesses search Etsy and Pinterest to discover artists and see what’s new. In February, Target showed some of my products I created for their Black History Month collection in 855 stores. Until December, I did not receive a regular salary because I had to take care of my employees first.
Q: How do you meet all these production requirements?
A: I have two part-time employees, but I mainly employ contractors who are paid by the hour. I have a great and supportive community in Cedar Rapids. I am surrounded by people who want to learn with me.
Q: What are your biggest challenges?
A: In the beginning, I had no business sense, no idea of the profit margin or the value of my time. But I had no intention of being a business leader and managing all these people. I realized that I needed to be in design — that’s what suits me best. So I added people with different skills to help me with marketing and shipping. I also reached out to women I knew with corporate jobs and outsourced HR and accounting to them.
Q: What’s the next step?
A: I can see our business growing in different decoration niches. I’m working with a strategist to figure out where we want to be in five years. Do I need a line of credit? Do I need investors? I’d like to keep growing – there’s so much room in a creative business.
– Know your weaknesses, such as accounting and human resources, and turn to professionals for help.
– Gain online exposure through marketplaces like Etsy and use the platform for marketing to large vendors.
– Expand your product line to attract new and returning customers.
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Former profession: Consultant for a large technology company
New Adventure: Pegasus Games
Q: You’ve known for a while that you’re not cut out for a desk job, right?
A: My time working for a big company was very taxing on my mental health and my soul. In June 2016, I quit my job to do my own thing: learn to code and start a website with my brother. After about two years, I got burned out from coding and we sold our website to a competitor. I wanted to do something with my hands, so I created “Welcome to Sysifus Corp”, a board game about corporate life. I wasn’t trying to get crazy rich. I was more like a starving artist who wanted to know if it was possible to do something that I was proud of.
Q: How has covid-19 affected your gaming business?
A: The pandemic accelerated his release. At the moment, there is a movement of people who do not want to work. It’s anti-work, down with corporate America. I took the opportunity. I posted a Kickstarter campaign in early 2021 that raised around $18,000 – enough money to order 1,000 copies from the manufacturer. The final retail version of the game was released in October 2021. Thanks to Kickstarter, I sold over 200 games. Then I sent 200 or 250 copies to a board game distributor.
Q: Are you still a starving artist?
A: I was until recently. During Thanksgiving, my brother posted a picture of my game on Reddit, and I got a ton of orders. It’s been a hectic week after Thanksgiving. I went to my dad’s warehouse to ship over 100 games. In the end, I pretty much broke even with the Kickstarter money. I didn’t take a salary in 2021. Still, I’m happier with my life now than when I was working for a company. I can spend time with my girlfriend and my family – and my cat, Lou.
Q: What’s holding you back?
A: I grossly underestimated the shipping costs, especially with all the global shipping issues. I now work with a few companies that ship for you, and I get better rates. I also realized that it is cheaper to use standard box sizes instead of custom sizes.
Q; And after?
A: My next game to be released is called “Love, Career & Magic”, a game based on a Japanese reality TV show. This time I will have a marketing campaign in place before launching another Kickstarter. I need to build my following. People signed up for my mailing list and they follow me on social media.
– Consider crowdfunding your start-up costs and marketing your product to donors.
– Look for ways to reduce trade costs, such as standard box sizes and bulk shipping.