Economic slowdown breeds business startups

Layoffs force people to seek new training, career paths

 

Photo by Paul Moore

After quitting Georgia-Pacific just before she would have been laid off in 2003, Sheila King became certified as a massage therapist and opened King Therapeutic Massage in 2004.

 

Sheila King said it was devastating when she found out both she and her husband were going to be laid off from Georgia-Pacific West, Inc.

However, they weren’t going to be laid off at the same time: King’s husband, Ron, was to be laid off in 1998 and Sheila wouldn’t go until 2003.

But instead of dwelling in their uncertainty about the future, King and her husband chose to be optimistic.

“It can either be the worst thing in the world or you can make it a positive,” King said.

Instead of, “What are we going to do now?” King said it became, “What do we get to do now?”

According to an October 2007 study by the Washington State Department of Revenue and other state agencies, more small businesses start up during times of employment and economic slowdowns. Small businesses are defined as those that employ 20 or fewer workers or are solely operated by the owner and earn $3 million or less in annual gross income,

“Sole proprietor formation is higher in years with slow economic growth. This may be because many laid-off employees start small businesses,” the study stated.

Local data appears to coincide. Around the beginning of 2008, Bellingham business registrations bottomed out at 58 licenses awarded but as the downturn progressed and dominated news coverage—business registrations shot up to 117 in May. While there is not necessarily a causal relationship, the data shows that as the economy slowed down more small businesses started up.

After King was laid off in 2003, she enrolled in a massage school in Everett and graduated in August 2004. By the following month, she opened King Therapeutic Massage in Bellingham.

 

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Should I stay or should I go?

Kevin Hoult, a certified business adviser for Western Washington University’s Small Business Development Center, said in times of higher unemployment and a shrinking economy, the unemployed must decide to stick it out in Bellingham or move to find other opportunities.

“People don’t want to leave,” Hoult said. “The weather and the quality of life here create an extra element that makes people want to stay and make it work.”

However, Hoult said, the situation is different in other areas of the United States.

“In places like Detroit, if you get laid off—you move,” Hoult said.

Hoult said people tend to break off into two categories: those who consider starting their own businesses and those who seek training for positions in other industries.

He said if a person is carrying a substantial amount of debt or supporting a family, he or she will most likely train to join another company rather than start a new business.

 

From fired to hired

King said when her husband was laid off, there was pressure for him to get a new job so that she could quit and begin her new venture.

The return to school apparently did wonders for her husband because he graduated as student of the year, King said.

“He got to wear the gold tassels and everything,” King said. “It was really exciting.”

King had taken a couple of massage classes at Whatcom Community College and enjoyed it.

“The more I learned, the more I wanted to learn,” she said.

However, she found that many massage positions that were available were with day spas, which didn’t appeal to her.

“My interests lay more with the medical aspects of massage than with the spa aspects,” King said.

So, immediately after graduating from massage school, she created her own opportunity.

Dave Knapp, worker retraining coordinator at Bellingham Technical College, said once laid-off employees get past the emotional aspects of their circumstances, they are generally excited about their futures.

“Some of these people had been with their companies for more than 30 years,” Knapp said. “Once they get past the emotional roller coaster, they are generally very enthusiastic.”

Knapp said the multiple rounds of layoff at G-P and layoffs at Tree Island, a county fastener manufacturer, have driven hordes of workers to Bellingham Technical College for retraining.

He said many of these employees come from the heavy industry sector and choose to stay in that area.

“We see a lot of people getting into process technology to work at refineries,” Knapp said.

However, a large number of students get into something new.

“Many others have taken this as an opportunity to get into nursing or computer systems,” Knapp said.

One thing Knapp said is noticeable when retraining laid-off workers, is the bond that is formed when a group is laid off and then seeks retraining as a group. He said these groups band together to help everyone succeed.

“I always see the G-P group together having lunch or studying together,” Knapp said.

However, Knapp said many of these people will not go on to start their own businesses.

“I think they really appreciated the security of a job with a big company,” Knapp said.

with their companies for more than 30 years,” Knapp said. “Once they get past the emotional roller coaster, they are generally very enthusiastic.”

Knapp said the multiple rounds of layoff at G-P and layoffs at Tree Island, a county fastener manufacturer, have driven hordes of workers to Bellingham Technical College for retraining.

He said many of these employees come from the heavy industry sector and choose to stay in that area.

“We see a lot of people getting into process technology to work at refineries,” Knapp said.

However, a large number of students get into something new.

“Many others have taken this as an opportunity to get into nursing or computer systems,” Knapp said.

One thing Knapp said is noticeable when retraining laid-off workers, is the bond that is formed when a group is laid off and then seeks retraining as a group. He said these groups band together to help everyone succeed.

“I always see the G-P group together having lunch or studying together,” Knapp said.

However, Knapp said many of these people will not go on to start their own businesses.

“I think they really appreciated the security of a job with a big company,” Knapp said.

 

Looking back

King said when she first heard about the layoffs at G-P, it scared her because she was used to G-P’s pay and benefits.

“Leaving that safety net is scary,” King said.

Hoult, from the Small Business Development Center, said that during an employment slowdown, some people struggle for a while but hopefully gain experiences that will get them where they want to go.

“Some might start up a business and fail but they might succeed in finding a connection for a new job down the road,” Hoult said.

Others, Hoult said, thrive in the circumstances and find happiness.

“Some say, ‘I wish this had happened five years ago,’” Hoult said.

For King and her husband, G-P was all they had known for decades and the idea of blazing a new path after all those years seemed almost impossible but in the end, they made it work.

Now, five years later, King’s husband is the lead diesel mechanic for Birch Equipment and King Therapeutic Massage is still in business.

“There were some tense moments but I wouldn’t change anything that has happened in the past five years for anything in the world.”

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