Entrepreneurs hope to beat economic odds

Thu Mar 5, 2009 7:29am EST
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By Ellen Wulfhorst

NEW YORK (Reuters) - Rachel Dooley quit her high-paying job as an attorney a month ago to launch a jewelry business, and her friends think she is crazy.

Her friends may be right, according to statistics showing that small and entrepreneurial businesses are suffering at record rates in the recession. But struggling as they may be, many entrepreneurs say they prefer working on their own, launching a small business or promoting an original idea.

In fact, others' job losses, layoffs and workplace anxieties made the move easier, said Dooley, who creates and sells the Gemma Redux jewelry line.

"Watching my friends' careers go up in smoke and watching tons of people getting laid off gave me the strength," she said. "I thought, 'Who knows when that's going to happen to me?'"

But does she panic? "Probably once a day," she said. "Looking at my bank account and seeing this is where we're at, and the only way this grows is if I do it, it's daunting."

Only two-thirds of small business start-ups survive two years and fewer than half survive four years, according to the U.S. Small Business Administration.

Also, the U.S. self-employment rate in nonagricultural industries last year was 6.9 percent, the lowest on record, the U.S. Bureau of Labor Statistics said.

"Given the turmoil in the credit and financial markets, it doesn't appear that currently it would be a very good time to start a business," said BLS economist Steve Hipple.   Continued...

<p>A woman is seen shopping in New York November 24, 2008. REUTERS/Shannon Stapleton</p>