Act II: A Biz of One's Own
Eight years ago, Tom Washburn left his established career as a fixed-income researcher at Baltimore investment house Alex. Brown & Sons and opened his own ice cream shop. "I always had the entrepreneurial itch," he says. The idea was planted when Washburn was having dinner with some friends, and they said what Baltimore really needed was a homemade ice cream shop like the one they remembered from their childhood in Ithaca, N.Y.
Washburn spent about a year researching the industry, attending conventions, and talking with retailers. "I knew nothing about selling ice cream," he says. "I wanted to open a store where [people] wanted to go and hang out," he says. "And [I wanted to] create a brand identity. I was always attracted to making a product that people would enjoy."
So Washburn left his corporate life, plunked down $200,000, bought ice cream-making equipment, found a location, and began working seven days a week at Moxley's(which he named after the family dog). "Looking back, it was like opening two businesses at the same time: manufacturing and retailing," he says. "I had no experience on either side, but I learned a lot very quickly." Today, Moxley's is an award-winning ice cream brand and has expanded to three Baltimore locations. Moreover, Washburn is developing a wholesale business. "My dream came true," he says.
For many these days, a corporate career is increasingly becoming a prelude to an entrepreneurial second act. Every year untold thousands shed their corporate skins and begin life anew as entrepreneurs. These "second acts' vary, as do the motivations for them. For some, it's the right combination of time and money, while for others it takes a confluence of events that finally steers them toward being their own bosses.
Given the cycles of economic and labor-market volatility, the last gasp of job security, and the growing number of baby boomers who prefer to roll up their sleeves rather than quietly retire, entrepreneurialism is becoming an attractive choice for corporate refugees. "There is no question about it," says John Challenger, chief executive officer of Challenger, Gray & Christmas, a Chicago-based international outplacement-consulting firm. "More people today are striking out on their own, either involuntarily or voluntarily."
"Unemployment has dropped to [the] 5% level, turning this into a sellers' market. People are more in demand, and companies are having a hard time [finding] people," Challenger notes. "If [someone decides to] go out on their own and it doesn't work, they can go back to another job. They aren't going out on their own in the middle of a period where the economy is in tatters."
One singularly large pool of new entrepreneurs comes from the ranks of the downsized. Following the dot-com bust, many who were laid off decided that rather than wade back into the corporate world, they would view their layoff as a blessing and start their own companies.
"The world has changed," says Monica Doss, president of the Council for Entrepreneurial Development, a nonprofit organization that works to help create and expand high-growth entrepreneurial business in North Carolina's Research Triangle Region. "It's not about getting a job -- it's about making a job and making your own way."
Many women who have hit the proverbial glass ceiling or want greater flexibility and control over their own destinies also see striking out on their own as an attractive opportunity. According to the Center for Women's Business Research, 10.6 million privately held companies are now at least 50%-owned by women. And from 1997 to 2004, the estimated growth rate in the number of female-owned companies reached 17%, nearly twice that of all businesses, at 9%.
RECIPE FOR SUCCESS.
Five years ago, Amy Hilliard, 53, decided to leave a 20-year career as a marketing executive with such companies as L'Oreal and Gillette to launch ComfortCake in Chicago. The single mother of two, who has a Harvard MBA, says she had to sell her house to start the business because she couldn't get a loan. But the $300,000 investment was worth it.
Today, Hilliard's company sells cakes to customers such as Alberton's, Jewel, Walgreens, and the Chicago Public School System, as well as online through her Web site, www.comfortcake.com. Such luminaries as singer Smokey Robinson, Oprah Winfrey, and former pro footballer Dave Duerson have tried Hilliard's Southern-style pound cakes, which are based on a family recipe.
Hilliard says the risk was worth the rewards. "I didn't realize how hard it would be," she says. "Food is a very complex business. But it's gratifying to create something from scratch. It's never boring. Every day something is new, and I'm using all of my cylinders at once."
FORGET THE PUTTER.
Then there are the silver entrepreneurs. As the retirement age rises and seniors live longer, more active lives, the idea of a traditional retirement -- of golf and relaxation -- is being upended as more seniors start new businesses. In December, a study by Boston-based Putnam Research reported that some 7 million previously retired Americans have returned to work. The survey, entitled "The Working Retired," noted that almost one-third of American retirees are resuming some type of career.
Such second acts are the subject of this multipart special report, to be rolled out over the next four days of BusinessWeek Online. The first part will examine the trends and identify the people who are staging second acts. Part two takes a look at the resources available to aspiring entrepreneurs hoping to strike out on their own. It also includes a self-assessment quiz to help you determine whether a second act is right for you. Part three poses the question: "Do you need an MBA to stage your second act?" And part four profiles second-act franchise odyssey.