By Charanna Alexander and Bartram Nason
When Cynthia Jermin received a pink slip last year and lost her dream job at an investment bank, she left with a smile and a plan. "I had a smile on my face, because I was ready. I saw it as an opportunity to embark on this entrepreneurial journey," said Jermin.
Instead of looking for a new position, Jermin, who had been assistant vice president at Credit Suisse, decided to start a business. With financial support of her husband to avoid going into debt, she turned her guest bedroom into an office and launched Fundamental Life Products from her house in St. Albans, Queens. "It was better to start small and grow, than to rent a space, rent a factory, hire people, and then, six months in, you've run out of capital, and you have to let everybody go," said Jermin.
Jermin's two story duplex is now littered with rolls of fabric and sewing equipment. Most of her days are spent at home, fulfilling orders and managing the business's finances. It took Jermin nearly a year to design and sell her first product, the Royal NapMat, a colorful, roll-up mattress for toddlers and preschoolers that she markets to daycare centers and children stores and through her website.
As more and more New Yorkers are laid off, many are starting home-based enterprises as an alternative to unemployment. Jonathan Medows, an accountant who deals with small businesses, said around 90 percent of his clients today are home based entrepreneurs, up from 60 percent in April. Comparatively, a 2006 report from the Firm Survey, a foundation that tracks thousands of recently-launched entrepreneurs, said that half of start-up businesses were home-based.
Many of Medows’ clients were in finance, information technology, and the media, and are now striking out on their own, working from their kitchen tables to keep overhead low. "People are getting discouraged about finding new jobs," he said. "Everybody that comes in is self-employed."
"This is when people start businesses," said Kathi Elster, a consultant and author of "Working For You Isn't Working For Me." "The limit of how many jobs that are available pushes people into becoming a freelancer, or starting a small business."
The Small Business Administration reported in June that the number of unincorporated, self-employed individuals has increased 200,000 in the last year. The New York City Department of Small Business Services has also seen significant growth at its monthly programs that offer assistance to people looking to start their own company.
"We have had to add more classes and workshops to accommodate the increased number of people coming to our events," said Laura Postiglione, press secretary at NYSBS. "We have seen an increase in unemployed people looking to start their own businesses."
And challenges of starting a business from home are faced not just people who had had long professional careers. Twenty-three-year-old Brianna Simpson started a cupcake catering business from her Washington Heights apartment after being laid off in August from a retail position at Ann Taylor. But she is still struggling to make ends meet. "When you first start a business, you have to put out a lot more money than you're probably going to get back. I make a decent amount, but I have to be really careful. I can't spend as much as I want," said Simpson.
For Jermin, as with other new home-based entrepreneurs, the challenge is managing her home while simultaneously running a business.
"There is always something at home to be done; dishes, laundry, grocery shopping, etc. Also, as a working mom there are the karate classes, piano lessons and play dates that require time on a weekly basis," said Jermin, who shares her home with her husband, an executive chef in Midtown Manhattan, and their 5-year old son. "When I worked in an office, I was fully engaged in the business at hand, with very little distractions."
Jermin now divides her days between her company and home-schooling her son, Craig. Jermin said she gets up around 5 a.m. to check orders and handle billing before he is awake. "Now that he's home with me, I've had to integrate teaching him with running the business. That has been a huge challenge. It has stretched me," she said. During the day, she moves her son's desk around the house so that he can work along side his mother, wherever she is.
"If I had to write everything I wanted in a job, this job [at Credit Suisse] had it, but still I was not fulfilled," she said. "[Starting a business] is something that I always wanted to do, always dreamed about doing, and thankfully, when the time came, I was ready to make that transition.” said Jermin, who had worked on Wall Street for 20 years. Jermin’s lifestyle now must accommodate her drastically altered income.
"I was making six figures. So we're talking about a 75 percent cut. Huge difference," said Jermin. The Royal NapMats, which cost Jermin $25 to manufacture, retail for around $60. This year, she estimates that her corporation will see $25,000 in revenue.
Some of the big ticket items, like vacations to Tahiti, have been cut and smaller luxuries such as dining out are less frequent. But Jermin remains positive. "Fortunately, the best things in life, a lot of them are free; socializing with friends and family, spending time together and enjoying one another. We have been enjoying life without all the accoutrements that we were used to," she said.
Along with transforming her lifestyle, Jermin has also transformed her living space to accommodate her new venture. "I find myself using the entire home, particularly when I have a large order. I had a large order for 50 mats and so the dining room becomes the quality control room and the living room becomes the shipping room," said Jermin, whose business is incorporated, but does not require a license. "When you have a home based business your business is like another member of the family."
As for her entrepreneurial future, she plans to launch a new online store that sells eco-friendly products for children next year, and a new line of women's merchandise is currently in the works.
Having re-purposed her home and built her business from scratch, Jermin encourages other entrepreneurs to follow their passion. "If you are starting a home based business, have a totally separate space dedicated for the business. If you can, have totally separate hours for the business, treat it as if you were going out to work. With entrepreneurship there's freedom, with freedom there is great responsibility. Entrepreneurship should not be taken lightly," she said.
