Small Business Entrepreneurs Triumph After Layoffs

Millions of Americans in the past year, from Wall Street bankers to Detroit autoworkers have lost their jobs as a result of the financial crisis. While many collect their unemployment and send resumes, a growing number of these displaced workers are striking out on their own.

Stephen Chen, left, and partners Alastair Onglingswan and Iris Chau founded GreenSoul Shoes, a business that manufactures sandals from recycled tires, after Chen and Chau were laid off from their jobs at Wall Street Firms.

(Adrian Mueller)

They are finding creative solutions not just to their own unemployment but to problems they believe can be fixed by creating new businesses.

"This is truly a remarkable time to become an entrepreneur," said Darren Hardy, publisher and editorial director of Success magazine.

"Every once in a while the capital system reshuffles the deck. Those who had control of markets and the supply chain suddenly lose it. Where it was once difficult for small businesses to punch into market, it is now quite easy. There has been a disruption of the status quo," he said.

When Bear Stearns collapsed last autumn, Stephen Chen didn't take long to start at another job.

Rather than scouring job postings and sending out countless resumes, Chen, 26, took matters into his own hands and saw unemployment as an opportunity.

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Within days of being laid off Chen went from fashioning complex computer models for a select group of powerful hedge fund managers to fashioning shoes for people around the world.

That entrepreneurial impulse has struck thousands of people across the country, who despite difficult economic times have decided to start their own businesses. The current economy is fraught with challenges for small business entrepreneurs. It is harder than it has been in decades to secure loans or lines of credit, health insurance is more expensive and home equity loans are scare due to falling property values.

But the recession has also created a unique opportunity for small, nimble startups to exploit niches left opened by lumbering or failed corporate giants.

Partnering with a two friends -- one of whom had also recently been laid off from a Wall Street firm -- Chen started a business, GreenSoul Shoes, which produces sandals from recycled automobile tires.

"The company is something we had been talking about for a while. We wanted to start a company that would be green and help people. If I hadn't been laid off, I don't know if the idea would ever have become a reality. The time was right," Chen said.

Chen received offers from several other firms, but decided instead to go into business with Iris Chau, an old friend who had also recently been laid off at JP MorganChase, and her husband Alistair Onglingswan. Onglingswan first came up with the idea for the company when he saw local people in the Philippines turning tires in shoes.

"We had discussed creating a company with certain core values: Stewardship of the planet, stewardship of the company, and stewardship of the people you work with," Chen said.