Job insecurity is getting worse and some members of Generation Y are choosing to run online businesses as a Plan B. One that will, hopefully, soon become Plan A.
Chrispen Pasipanodya is just one of over 37,000 employees at a telecommunications company; in this recession his job is not guaranteed. But he has a Plan B. If he loses his job, he will focus on his online start-up, 2ronto.
The 29-year-old sees the global recession as an opportunity to make his dream a reality. Last week, Pasipanodya launched www.2ronto.com, an online site offering information and a forum for discussion on Toronto's ethnically-diverse community. He sees 2ronto as "something that needs to be done regardless of what’s happening with the economy right now. There’s a lot of good that will come out of it."
Uniting Toronto’s disparate communities is his ultimate goal and the website is the first step. Eventually, Pasipanodya says, 2ronto will grow into a media network and include a magazine and a television channel. For now, he finances 2ronto solely with income from his day job. He has invested more than $6,000 into the website developed by a professional web-design team to date.
After a two hour power nap to "defragment" and shift into business mode, Pasipanodya works on the website until the early hours of the morning. He spends much of his free time on his Palm Pilot or in meetings with community leaders. Pasipanodya is also busy producing content for the site such as profiles of individuals from a variety of different backgrounds. The discussion forums on everything from immigration to nightlife are really the only areas that won't require his constant attention.
Pasipanodya has a bachelor’s degree in business as well as hands-on experience in running e-commerce sites, selling clothing and air freshener for cars, but he has tucked all of his other businesses away to concentrate on 2ronto.
His desire to see his own business thrive comes from his days as a child growing up in Harare, Zimbabwe. Pasipanodya watched as his father, a businessman, worked hard to provide for his mother and five siblings. "He passed away before he fully realized his dreams. So in a way I feel like it’s my obligation to continue what he started," says Pasipanodya. After his father passed away, the Pasipanodyas immigrated to Columbus, Ohio. Just three years ago, Pasipanodya moved to Toronto after his brother, a resident of Mississauga, boasted of the city’s job opportunities and ethnic diversity.
One of the first things he noticed was what he calls "the diversity deficit" in the city in terms of upper-management positions. He is working to correct the deficit by uniting the many communities and highlighting the good that they do.
Looking to expand an offline business
Sheila Jurschewsky is a 29-year-old online entrepreneur in search of cash to transform her plan B, into her plan A. Her online retail, or "e-tail," site features handbags, wallets, shoes, clothing and hair extensions.
"I would love to have more time for the business," she says. She would like to get a loan to expand the website. "But," she says, "if your credit is really not good, nobody’s giving you a loan. That’s why the business is where it is now."
Jurschewsky launched www.SJEnterprise.com last December after paying a colleague (who doubles as a web-designer) $600 to set up the e-commerce site. She says it was time to expand the market of a almost eight-year old home-based business. Before the website, Jurschewsky relied solely on word of mouth to sell her bags and hair. Everyone in Jurschewsky's email address book has received a link to the site and a request to forward the email on to others.
From 9 a.m. until 5 p.m. every work week, Jurschewsky works as a debt collector for an auto classifieds company. Over the past six months, she has seen colleagues come and go as revenue declines.
But, Jurschewsky may be on track to leaving her day job and making a living off the World Wide Web. According to Statistics Canada, Canadians placed almost $12.8 billion worth of online shopping orders in 2007 alone. Clothing, jewellery and accessories ranked among some of the most popular items in e-tail.
"It’s always good to have a plan B"
Morley Gunderson, an economics professor at the University of Toronto, has done extensive research into the labour market. He has found that Generation Y (born between 1979 and 1994) is very resourceful. He points out that work in today's market is "much more flexible" and Gen Y'ers are more likely than previous generations to be employed in limited-term contract and part-time work. "In all those circumstances," he explains, "it's probably even more important to have a plan B in place."
With the Ontario unemployment rate at a 12-year low of 8.7%, and labour market economists forecasting a continued decline, a tech-savvy generation is experiencing job insecurity like never before. In 1997, for example, Pasipanodya and Jurschewsky were only 17 and this is the only recession they've ever seen.
Shashi Bhat is an employability support counsellor at Ryerson University. In her daily encounters, she works with a wide range of students ranging from undergraduates to continuing education students and alumni. She says that this academic year, students are certainly more concerned about employment, but remain very proactive and resourceful (choosing to double major and have diverse work experiences). "Nowadays, students want variety," she says, "It's not like before where you would stick to a job... for the next ten or 15 years."
Bhat advises Ryerson students and alumni that "there isn't any difference between what you should do during a recession and what you should do not during a recession."
A viable business model, marketing and start-up cash
While there does not seem to be a magic formula for online success, online entrepreneurs are looking for suggestions on what to do, and more importantly, what not to do.
As the founder of PlanetYou, Jason Robinson develops mainly web-based projects for a range of international organizations such as UNICEF and Save the Children Sweden.
Robinson says that a lot of businesses out there, for example, social networking businesses, are extremely popular but haven't found a viable business model. He says that it’s thanks to their “really deep pockets,” or venture capital, that they are able to stay in the red for a long period of time.
Aside from creating a viable business plan, Robinson considers marketing and start-up capital to be the great challenges to many online start-ups. And he says the recession may be making it even more difficult to find friends or family members who are willing to lend cash to online entrepreneurs. He says, "It depends on the business," but there are many opportunities for the entrepreneur with an innovative idea as companies adopt more conservative, recession-proof approaches.
He says that while marketing is often overlooked, there are many ad networks, including Google AdWords, Yahoo SearchMarketing, and Microsoft adCenter, that provide efficient ways of advertising. And there are always the more traditional advertising opportunities .
Above all, Robinson advises online start-ups looking to build a stronger customer base to: "Find out where your potential customers hang out online and actually participate in those communities...Through your participation, people can find out about what you're doing." And, of course, "you should mention your business whenever you create an online profile."
More information on:
UNEMPLOYMENT
The increasing Canadian unemployment rate (from June 2008 to February 2009)
Job insecurity 'getting worse' In an April 8, 2009 article Steve Schifferes of the BBC takes a look at what unemployment means for people living in some of the poorest regions of the world.
GENERATION Y WORKERS
STARTING AN ONLINE BUSINESS
5 universal tips for successful eCommerce sites Jeff Olson offers some good advice on e-commerce sites. From a March 23, 2009 article on SmashingMagazine.com.