The state of the economy has forced people to find other ways to make money and that means, for many, starting their own businesses to create new revenue streams.
â€œI cannot get a job to save my life,â€ said Melanie Walker, 23, who is four years into her jewelry design business after graduating from Howard University as a management major in 2007. â€œIâ€™m a college grad. I canâ€™t get a decent job, so I have to get two other jobs to supplement my income to just barely cover my bills.â€
By becoming self-employed, Walker and many others are relying on entrepreneurial ventures to weather the current financial storm.
â€œGood references and work experiences in this kind of economy really donâ€™t matter,â€ Walker said.
Beacon of Hope
Gladys Kamau, business development specialist at the Department of Small and Local Business Development (DSLBD), has noticed an increase in traffic to her office, located blocks away from Chinatown, since late last year.
Professionals are increasingly seeking technical assistance and education through the free classes provide at the DSLBD, according to Kamau.
â€œThey always will start off with â€˜Iâ€™m about to lose my job,â€™ or â€˜I have lost my job,â€™â€ Kamau said.
Kamau assess professionals and either recommends further education or provides technical assistance in materializing the business.
Fear of the Unknown Henrietta Robinson, CEO of the Stalwart Business Development Group, has also noticed an increase in clients seeking her assistance since Septemberâ€”â€œattorneys even doctors and business people,â€ Robinson said.
Robinson, an entrepreneur who has seven years of experience helping others start businesses, said that many people come into her office â€œgripped with fearâ€”fear of the unknown.â€
â€œThere are a large number of people and a large number of professions that are out of work,â€ Robinson added.
According to the Bureau of Labor Statistics, the Districtâ€™s unemployment rate is 9.3 percent, a 3.4 percent increase from last year.
On a national scale, industrial, retail and corporate industries loss of 651,000 jobs in February and the unemployment rate increased from 7.6 percent to 8.1 percent.
Robinson puts faces with the numbers of jobs lost in the headlines during her weekly seminars on such topics as business plan development and securing loans. Robinsonâ€™s sessions, ranging from $50 to $200, are three hours and scheduled after 5 p.m. on weekdays.
Walker has had to kick her business, Maylaniâ€™s Jewels, into high gear to make up for financial shortcomings.
Walker saw success in her business, at first, due to low manufacturing cost. Even in success, however, entrepreneurs like Walker are facing financial challenges because of unpredictable markets. Walker said her business has been impacted by the increase in cost of materials and shipping, which makes meeting demands and maintaining profitability difficult. Yet, she said the money that she makes from her two part-time jobs is not enough.
â€œI canâ€™t go and spend the money that I make on my paycheck on some materials, because everything is going to my bills,â€ Walker said.
Walker also said she realizes that many people are losing the disposable income needed to purchase the jewelry she sells.
Availability of Credit
With the availability of credit dwindling, individuals have to front more of their operating cost and expenses, according to Kamau.
â€œI know some [business owners] that have had their lines of credit reduced, so that affects their money, or just their plans for expansion,â€ Kamau said.
Kamau said people looking to start their own business, as well as established entrepreneurs, are being crippled by reduced credit lines.
Michael Stamler, spokesman for the U.S. Small Business Administration (SBA), said that small business owners facing the credit crunch will soon have reason to rejoice.
President Barack Obamaâ€™s stimulus bill would grant $730 million to the SBA, allowing the organization to guarantee a higher percent of loans approved through the SBA. Micro loans up to $35,000 will now be available, as well as money granted to assist expansion and staffing costs incurred by small business owners, according to Stamler.