Armed with ample management experience, years of industry knowledge and a vast array of contacts, corporate executives are leaving their corner offices-whether by choice or by force-to start their own businesses. Despite the decidedly different working conditions, the rewards, they say, are vast.
While Solow estimates most executives who are laid off land their next jobs at salary levels about
15 percent lower, the earnings potential for entrepreneurs is much higher. Plus, owning a business allows ex-execs to use their existing skills, remain in positions of authority, and work in an environment free of the fear that today's the day they'll be handed a pink slip.
Even so, after deciding to jump off the corporate track, executives who don entrepreneurial hats often have their work cut out for them, say experts. One of the biggest hurdles they must learn to overcome? Moving from a narrowly defined job focus into that all-encompassing role of entrepreneur.
"The people who are really good at working in corporate life are going to have trouble adjusting to being on their own," says Darr. "They have to get used to being responsible for doing everything themselves because most [entrepreneurs] start out on their own or with very few [employees]."
David Keillor can vouch for the adversity that comes with emerging from the corporate cocoon. After 30 years working for IBM in Rochester, Minnesota, the senior engineer says he "saw the writing on the wall" and accepted a buyout package in July 1993. Less than a week later, he and his wife, Ina, 57, and two other ex-IBMers started Technology Concepts Inc., a software company that develops multiple listings software for the real estate industry. While starting a business in the computer industry was a natural move for him, Keillor says, juggling such a vast array of responsibilities, frankly, wasn't.
"In a small company, you truly wear a lot of hats," admits Keillor, 56, whose company brought in $180,000 in 1995. "Everything from business plans to purchasing a telephone system to stocking supply cabinets and ordering furniture was challenging. It was something I initially wasn't used to."
Rather than calling someone to fix problems or purchase equipment the way he had at IBM, Keillor says he was stuck dealing with "1,001 little things that added up to big stuff." His strategy for coping? Jump in feet first. In the start-up phase, Keillor chose to assume much of the burden of daily operations, while the other founders handled the technical and human resources aspects of the business. Thankfully, now that the company is on more solid ground, Keillor is slowly beginning to delegate.
"At least I don't have to vacuum the floor anymore," Keillor laughs. "We just hired someone."