Downsized Into Entrepreneurship, the 21st Century Way

What’s the answer to being downsized? According to some, the answer is “start a business.”

In a recent survey by RingCentral, twenty-two (22%) of small business owners said they started a business after being downsized. One of RingCentral’s customers, Chad Whitermore, started after being downsized.

His example is not unusual. With starting a business being so inexpensive, it can seem like an easy answer to a difficult situation. Of course, once you get started in your business, that’s when the real challenges begin.

Keeping expenses low is a huge part of being successful in a small business. Most business owners instinctively know they have to structure their businesses to keep expenses low, especially in the face of soft economic times.

For instance, other parts of the survey show that a low overhead structure characterizes many small businesses today:

  • Nearly 40% of small businesses cut back on office space to have their employees work from home.
  • About 50% are conducting more meetings virtually versus in person.

“This survey demonstrates that the workplace is changing, as many former employees become business owners and many employees in small businesses begin to work remotely. The ability to work independently and remotely offers new efficiency opportunities, but it also means working without the established infrastructure of a large organization,” said Vlad Shmunis, CEO of RingCentral.

The survey was conducted by RingCentral, a provider of hosted phone systems that give you voicemail, automated attendant and other capabilities, based in Redwood city, California.

UPDATE:  Read the press release about the survey here.


Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

16 Reactions
  1. Anita,

    An interesting post – I’ve downsized my biz, too, in term of overhead 🙂

    I’m working from home right now, and given the fact that gas price tags are breaking record high, it’s heaven for me 😀

    Aside distractions from family members, working at home is a great way to hang out with your family significantly more…


  2. Hi Noobpreneur,

    Yes, that’s another advantage to working at home — you don’t have to be away from family for 12 hours a day.

    Historically, all businesses used to integrate home and business. It was common for the business owner to live in or near the business (or start a business in or near the home).

    Even the Rothschilds originally had their bank in Paris attached to the home.

    It’s only when we got to the Industrial Revolution that people started separating home and work widely.


  3. B Smith @ Wealth and Wisdom

    A huge advantage from working at home is you can focus on productivity vs. face time. I spend 90% of my time out of the office. I am either in front of a customer or at home working. My productivity is through the roof while I have been able to slash my hours in half. All this while improving my standing with my company (I’m in the top 5% of salesmen).

  4. Businesses are getting smarter about their expenses. It makes really good sense to have employees work from home to eliminate the need for excessive office space, supplies and utility payments. For employees who spent hours just in commuting alone, a home office is a god send.

  5. I work from home and find it very productive – until my kids show up:). A good resource on this topic is The Future of Work blog by Jim Ware and group. They’ve done a lot of work linking office design, facilities, mobility and the future of work. Their blog is at:


  6. Absolutely, the only way to avoid getting depressed about being or getting downsized is to start a business.

    Given the option to work from home, helps entrepreneurs focus more on productivity and results. Their results shoots through the roof if they are disciplined enough.

    Great article.


  7. I have to agree that I’ve been more productive working from home without all the distractions of being in an office environment. It’s been a real blessing and has also helped me to realize how extremely focused I am when I’m out of that type of atmosphere. And it’s fast catching acceptance with many other companies right now. Very recently, two of my friends have also been afforded the ability to work from home as oppossed to reporting to the office daily.

  8. I too got downsized and decided to start a home-based business. Besides saving on gas and time (I used to commute at least 90 mins a day!), it has been a great way for me to spend more time with my family and be more involved with my children’s activities.

    However, I am unexpectly finding increase in expenditure associated with re-organizing the my home into a home office, arranging for my children to be engaged somewhere else (camp, daycare) so I can focus more and take business calls in peace. Another issues is also that my family think just because I am home, I have time to socialize. This highlights the poor planning arising from becoming a reluctant business owner I guess

  9. One alternative to working at home is coworking, which a movement around the creation of low cost work spaces for independent works. The coworking blog discusses this movement in detail and has links to most of the coworking spaces in the US (and some overseas). The blog is at:

  10. Captain Franchise

    I work from home as well, the money I save on the commute alone I think tops 1000$ USD a month, not to mention all the food (eating out at lunch) and dry cleaning I save on. It truely is a dream situation for me.

  11. Anita,

    Very timely post! I think there is MUCH MUCH to be said about running a virtual company. It saves a lot of overhead, and gives much more flexibility.

  12. Steve, It’s clear to me that lots of entrepreneurs are working this way — working at home and also with employees or contractors working out of their homes. I wish the tax and other regulations would “get with the program”. Thanks for pointing out those two resources.

    B. Smith, I love that point — yes, working at home can help you focus on what’s most important. And congrats about being in the top 5% of sales 🙂


  13. Martin Lindeskog

    I think it is practical to work from home, but I must say that we still need to create a place for personal business meetings. I want to create something called “The Third Place”. I was inspired by reading an article on coffee-houses in The Economist. I look forward to your comments on my blog post, The Third Place. Please click on my name if you want to read it.

  14. Martin Lindeskog

    Steve King,

    It was interesting to hear about coworking spaces. Do you have contact with people in this community? I think it could fit with our business idea to have a meeting place for entrepreneurs and business minded individuals. We want to build relationships with new partners, creating a global network of meeting places.

  15. Martin:

    The best way to meet this community is through their Google Group. It is at:

    The group also has a wiki at:

    It is a very friendly and helpful group.


  16. Martin Lindeskog


    Thanks for the information. I have joined the group on Google.