Dreaming of being your own boss? Keep it between the sheets because this is no time to leave your employer to start up your own shop, say the brains at Challenger, Gray and Christmas, an executive placement and research firm.
Credit is tight, inflation is driving the cost of doing business out of control, consolidation makes for cut-throat competition and potential customers are facing squeaky budgets. High risk, low reward, said CGC in a recent note to reporters on the topic.
And few dare to try.
The CGC Job Market Index released July 17 found very few among the unemployed management ranks willing to leave the job search for their own venture. CGC polled 3,000 recently "discharged" managers and executives.
"The startup rate among unemployed managers and executives fell to 4.3 percent in the second quarter, compared to 7.2 percent in the first quarter. Last year, 6 percent of job seekers abandoned the traditional job market for entrepreneurship in the second quarter, according to Challenger report... The second quarter figure was the lowest since the fourth quarter of 2000, when only 3.5 percent of job seekers started their own firms."
The challenger survey backs up news from the National Federation of Independent Business, which reported the confidence level of entrepreneurs, what it calls the Small Business Optimism Index dropped in June to a "recession level 89.2... as bad as recorded in 1980-82, the worst recession in recent decades."
Keep Your Day Job and Your Dream of Not Having One
A poor economy makes it a tough time to start a business, keep a business or even work for one, but I wouldn't say it's a discouraging factor. Innovation, good products and good services always stand a chance of success.
For the guys and gals polled by CGC, I'd keep looking for that new employer. For the folks in the cubicle quarries, keep slogging away. But don't let it keep you from planning or even starting your own startup.
That's easy to say, but what better time to take on tight credit, high inflation and tough competition than when someone else is paying you a salary and benefits?