Small Business Entrepreneurs Triumph After Layoffs

"In the past we've spikes in new start ups during recessions," he said.

What makes this recession unique compared to the downturn in the 1980s is the difficulty entrepreneurs have accessing traditional means of capital and credit.

"We have never seen such a steep decline in home values. People starting new businesses to get credit and capital often took a second mortgage on their house to purchase inventory, machinery or buy a store," he said.

Additionally, he said, banks are giving fewer loans to new businesses and credit card companies are increasing interest rates, limiting two other traditional sources of startup capital.

The other "really significant factor," preventing the growth of small businesses is the rising cost of health care, he said.

Small Business Challenges

McWilliams said the thing that separates successful businesses from those that fail is having a good business plan.

"Small businesses," said President Obama, "are the heart of the American economy. They're responsible for half of all private sector jobs – and they create roughly 70 percent of all new jobs in the past decade. So small businesses are not only job generators, they're also at the heart of the American dream," he said.

Brian Conrad, 46, was laid off as a software engineer for the financial information company Dun and Bradstreet when his job was outsourced to India.

Investing his severance and "most of my life savings," Conrad and a partner opened the Blue Monkey restaurant and sports bar in Pennsylvania's Lehigh Valley.

In March, Conrad met Obama just before the president gave a speech on federal support of small businesses.

"Being an entrepreneur is a lot more responsibility that being an employee," said Conrad who has plans to open another restaurant. "It is all up to me whether this business succeeds or fails and I wouldn't have it any other way."

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