Phil French got the news last November. He was laid off — again. He wasn’t surprised. Since the family-owned construction business he had worked for was bought by a larger company, he had been laid off several times over the past few years, as the construction season wound down. Year-round employment was a thing of the past for French.
But this time, Phil French had had enough.
“If I’m not going to have a full-time job in the construction field with the big companies, I’ve got to do it by myself,” said French, 49. “I decided it made more sense for me to take care of myself, make my own goals — instead of make goals for them.”
French followed a path that some take when they lose their jobs, and opened his own business. He put his 26 years of experience as a heavy-equipment mechanic to work for himself, building a garage at his Orland home and opening Phil’s Automotive last spring.
Using his contacts in the construction industry, as well as his reputation as a mechanic, he has secured steady work, fixing everything from tractor-trailers to excavators, farm equipment and sedans in his garage.
“I sleep 10 times better now. I’m not going to lay myself off his winter; I’m going to work all winter,” said French.
Maine, like the rest of the country and much of the world, has faced difficult economic times over the past few years. The country was officially in a recession from late 2007 until mid-2009. But the challenges continue, and indications are beginning to appear that we may be in a jobless recovery — while the economy improves, unemployment rates remain high.
“In a down economy of this nature — a jobless recovery — where people have been unemployed for a long period of time, a portion of them give up at some time and start their own business to establish employment and earn some income,” said Ed Cervone, senior program director and operations officer at the Maine Development Foundation, an economic think tank.
Maine tends to rank high in the rate of startups created in general, said Cervone. But a poor economy tends to lead more people to entrepreneurship.
“Generally speaking, during recessionary times entrepreneurship increases,” said Jim McConnon, a University of Maine Cooperative Extension specialist and professor of economics. “During hard times, you do have individuals that are starting businesses out of necessity.”
Maine actually has a program to make it easier for some unemployed people to explore entrepreneurship, said Mark Delisle, state director of the Maine Small Business Development Centers. Called the Maine Enterprise Option, it’s a partnership between the state Department of Labor and the centers. People who qualify can suspend traditional job search efforts and still collect unemployment benefits, instead working on a business plan and market research with a counselor.
Tom Gallant is the director of the Maine Small Business Development Center in Bangor. Over the past year, the center has helped entrepreneurs start 38 small businesses. Seven of them were people who had been laid off. That’s a higher number of laid-off clients than in the past, said Gallant.
They all had a few things in common, he said. They were all men. They all either wanted to start a business based on the work they had been doing, or one based on a hobby of theirs.
One was laid off from a manufacturing job and used his expertise to start a business providing a similar service. Another was laid off from a service-retail company, and he started a business acting as a middleman in the sector. Another’s company decided not to offer the expertise he provided, so he started a business to fill that need.
“They’re irritated and angry. They feel like the system and the ‘man’ has let them down,” said Gallant. “They don’t feel like they did anything to prompt it — not one of these were bad people. They feel like they sort of got caught in this thing.”
They tend to go through a “Why me?” period, then an angry period, said Gallant.
“They come out the other end with an entrepreneurial vigor,” said Gallant, who had worked with French to explore business opportunities.
Chuck Pelletier of Madawaska had retooled his life and skill sets several times, and had lost his job several times. So he decided to start his own business, working with his wife Pam Pelletier, as he headed into his retirement years.
He was a forest ranger for years, working in the remote woods 100 miles west of Ashland. But he wanted to be closer to home, to his wife and three kids. So he took a job with Fraser Paper, working first as a security guard and then as a tour foreman on three paper machines. He was laid off from Fraser in 2004, went back to forestry for a short time and then got his teaching degree.
He worked for the Madawaska School Department for a year, and then taught French for two years in Fort Kent before he was laid off again in 2009.
“I got tired of going to work one day and coming back that night without a job,” said Pelletier, 54. “I said, ‘Hey, if I’m going to work for a fool, I’m going to work for myself.’”
Pelletier had picked up a second property near Long Lake, and had been renting it out to vacationers. He decided to make a go of it, founding KLC Lakeside Rentals. He renovated a big, four-vehicle garage on the property into a second rental home, and has bought other properties in the Long Lake and Allagash areas.
KLC caters to family reunions in the summer; the first home they had to rent out is huge, with 16 beds, and the renovated garage has eight beds on the same lot, and snowmobilers and other winter enthusiasts come in the colder months. They offer canoes and a paddle boat to guests, and rent kayaks and a Jet Ski, as well.
They’ve had guests from as far away as France, Australia, Germany, England, Sweden and other countries, marketing their rentals over the Internet.
“I can’t complain — the bookings and whatnot have been good,” said Pelletier. “I think they’d be better if times were better economically.”
McConnon, the economist, noted that research has shown that the overall small business sector is important to the U.S. and Maine economy. A lot of new jobs come out of “very small business startups,” he said.
Maine has some large industries, but a vast number of small businesses. In Maine, businesses that employ 49 or fewer employees represented 96 percent of all businesses. In 2008, McConnon noted, there were 113,522 businesses without employees — sole proprietorships — and almost 24,000 with one to four employees.
Having that mix of some large but many small businesses makes for a diversified economy, said McConnon, and provides overall stability.
The trend of entrepreneurial activity is a sign of vitality, said Cervone, from the development foundation.
“The activity, in and of itself, is good for the economy; it gets new ideas going,” he said. “There’s an entrepreneurial class out there that’s going it on their own.”
He suggested that, given the importance of small businesses to Maine’s economy, policymakers may want to look at ways to support them. That’s done to a degree now, with programs like the Small Business Development Centers, the Maine Technology Institute and others. Some schools are working on entrepreneur programs, Cervone said, but perhaps more could be done.
“If this is either the new look or a big part of the new look of the employment and business base for Maine, if this is what our future looks like, give college kids, high school kids, primary school kids the basic skills, the motivational levels, ability and confidence to be able to go off and build it on their own.”