By Carrie Mason-Draffen
The demographics of Long Island’s entrepreneurs are evolving.
The challenging job market has left increasing numbers of workers who have lost high-paying jobs unable to find comparable positions.
These workers have responded by launching consulting businesses — sometimes in fields related to their careers, such as finance and technology, and sometimes in new fields they feel attracted to, such as healthy lifestyles.
Another change in Long Island’s entrepreneurial culture, as in the nation at large, is that the ranks of small-business owners who are women have been growing faster than the ranks of men.
Both of these groups break the mold of entrepreneurs on Long Island.
The Long Island chapter of the business advisory group Service Corps of Retired Executives once typically counseled nonexecutives or retired civil service workers who sought guidance on opening garden-variety businesses such as candy stores or laundromats, said Barry Klein, the Hauppauge-based chairman of SCORE’s local operation.
After the recession, growing numbers of laid-off workers, including some who had six-figure incomes, visited SCORE’s offices seeking advice on how to start a business, Klein said.
Often they sought to establish a consulting business in their areas of expertise, such as technology or finance. One “outlier,” a laid-off marketing vice president from a Fortune 500 company, even decided to return to house painting, Klein said, work he performed while in college.
“The significant change was we now had these people who had significant experience in corporate life,” he said. “When they accepted the reality that they were probably unable to secure a position commensurate with their salary level and experience, they decided they would try to go into business.”
And at the Small Business Development Center at Farmingdale State College, the growth in the number of women seeking counsel and technical support in starting a business has been faster than the growth in men.
Women “are interested in pursuing their own business ventures to have more flexibility to balance their work-family needs,” said Erica Chase-Gregory, the center’s acting director.
Nationally, female-led businesses are among the fastest-growing entrepreneurial firms, the Small Business Administration has said. Its Office of Advocacy estimates that firms owned by women grew 25 percent from 2002 to 2011, compared with 19 percent for all firms.
Another measure confirms the growth: Between 1997 and 2014, the number of businesses owned by women jumped 68 percent, compared with a 47 percent rise for the country overall, according to the American Express 2014 State of Women-Owned Businesses Report published earlier this year.
James Freeley, an associate professor of management at LIU Post, said the Island is particularly well suited for entrepreneurship because of its lack of an industrial base. About 90 percent of Long Island’s 95,000 businesses have fewer than 20 employees, 2012 census data show.
“Long Island is probably one of the most entrepreneurial economies in the country,” Freeley said. Historical examples include companies such as 1-800-Flowers.com Inc. and The Scotts Miracle-Gro Co., which started out on Long Island as entrepreneurial enterprises, he noted. Grumman Corp., now Northrop Grumman, was created in 1929 in a Baldwin garage.
Though defense firms were once the largest employers here, Freeley said their reliance on government contracts allowed for the higher cost of being based on Long Island. Non-contract-dependent companies, on the other hand, have had a harder time competing here, he said.
As a result, “Long Island skipped the whole manufacturing piece,” he said.
A paucity of corporate jobs has spurred small business formation, locally and nationally.
National data indicate that the job market continued to spur startups long after the recession officially ended in June 2009.
In March 2011, for example, 900,000 of the self-employed, or 5.5 percent, had been unemployed the previous year, the latest SBA data show. That was up from 3.6 percent in March 2006, before the recession began.
On Long Island, SCORE chairman Barry Klein said, laid-off managers, who made up 5 percent of the group’s clientele before the recession, shot up to as high as 50 percent of those seeking start-up advice during the depths of the recession in 2008 and 2009.
Even with improvements in the job market since then, Klein said, an estimated 10 percent of SCORE’s clients now are laid-off managers — double the percentage before the recession.
Though Long Island has regained the number of jobs it lost during the recession, growth has been concentrated in lower-paying areas, like retail.
Sometimes, professionals-turned-entrepreneurs explore a new line of work they find more personally appealing than their old careers.
Letitia Fowler, a West Hempstead resident, lost her $75,000-plus job as an accounting manager in March 2011 because the position was relocated to Florida.
“It was very devastating,” she said.
Her former employer later hired her back — but part time. To help make up the income difference, Fowler, 58, in 2012 started Personal Best Health and Wellness, a home-based healthy-lifestyle business she had long dreamed of starting after 30 years in the accounting industry.
“I wanted to do something that I was more passionate about,” she said.
The certified health coach counsels midlife women on how to lead healthy lifestyles, and she also advises other entrepreneurial coaches on how to manage their money.
Fowler said that being in the wellness business has personal benefits: She lost 35 pounds and no longer has to take blood pressure medicine.
“It was a blessing in disguise,” she said of the layoff. “I turned a negative into a positive.”
Some new entrepreneurs are motivated by quality-of-life issues rather than a layoff. A desire for more flexibility and to do “something with a larger purpose” prompted Judi Willard, a Lido Beach psychotherapist, to launch Say Please Inc. in 2009.
The home-based business’ signature product is Lunchbox Love cards with positive messages and “fun facts” that parents can tuck into the lunchboxes of their young children, tweens or teens.
“Why shouldn’t every mom be able . . . to give little notes to their kids?” said Willard, 47, a mother of two, ages 13 and 17.
Stores that sell her cards include the national arts and crafts retail chains Hobby Lobby and A.C. Moore, and mom and pop shops around the country and in Canada and Australia, she said.
Technology has given her business a big boost. Willard started Say Please Inc. with less than $5,000, most of it spent on a website.
She recently obtained an $11,000 loan from Kabbage Inc., an online lender that provides working capital to small businesses, that allowed her to upgrade her site to make it more consumer-friendly. The refurbished site launched in late July, and she estimates sales for that month were up 50 percent as a result.
Diane Eschenbach, a Rego Park, Queens-based business-startup specialist, said that with so many software apps available, home-based businesses can easily set up their own basic websites rather than paying someone to do so. And business owners can limit market-research expenses by testing the waters on social media, she said.
“It used to take many startups many years to break into an industry and to get a chunk of the market,” she said. “With the Internet everyone has an equal playing field.”
While many large companies have left Long Island for less expensive environs, Willard said having a Web-based business makes Long Island an ideal location.
“I do everything online,” she said. “But I can be in the city really quickly for any of the Javits shows.”
Willard’s business has grown so much that she has put her private practice on hold to devote herself full time to her card business.
No matter how compelling the reason for starting a home-based business, entrepreneurship is not for the faint of heart. Just half of all new establishments survive their first five years, the SBA said. And only one-third survive 10 years or more.
For Willard, the gamble has paid off. “You’ve got to take a leap of faith at some point and be passionate about what you’re doing,” she said. “If you love what you are doing, the money should follow.”