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Down but not out, laid-off workers look to self-employment programs

Published: Thursday, April 10 2014 7:30 p.m. MDT

Jeremiah Kraush researches jobs at WorkSource Oregon, Tuesday, March 16, 2010, in Tualatin, Ore. Oregon is one of several states that offers innovative self-employment programs, in addition to traditional unemployment programs, that help laid-off workers start their own businesses.

Rick Bowmer, Associated Press

Gracey Levine moved from California to Portland, Ore., in March 2013 to do catalog and Web design for a home decor company, but at the end of last year, the company had lay-offs. As the newest designer, Levine was let go.

"It was an ego blow," says Levine, 26, who has been doing design work for a decade. "But really it was a blessing in disguise."

Instead of looking for new work, Levine used the opportunity to go after her dream job — working for herself. She learned that Oregon is one of five states — including Delaware, Maine, New Jersey and New York — that offer innovative self-employment programs, in addition to traditional unemployment programs, that help laid-off workers start their own businesses.

"I was overjoyed because I didn’t want to look for another job — I wanted to start my own company. This was exactly what I wanted," says Levine.

Under self-employment assistance programs, also known as SEA programs or SEAPs, would-be entrepreneurs get financial aid equal to their unemployment insurance benefits for up to 26 weeks. They also get a boost in launching a business, including developing a business and feasibility plan. Levine, now just three months into the program, has already launched Gracey Levine Illustration & Design and started taking on clients.

In 2012, 586 hopeful self-starters enrolled in New York's SEA program, and 363 of those started their own businesses, according to the New York State Department of Labor. In Oregon, half of the successful SEA participants have created an average of 2.63 jobs, and the state was just awarded $332,576 by the U.S. Department of Labor to expand its program to entrepreneurs like Levine. Critics of the programs question whether SEA programs create real jobs, but proponents see them as a boost in an otherwise sluggish job market.

How it works

Levine's business plan isn't your typical corporate document; it has all the touches you'd expect from a designer: A Venn diagram in pink and green captures her company's core message, including words like "feminine" and "whimsical," as well as "quality," "intuitive" and "on-target" in varied stylish fonts. The cover sports a green chevron pattern border and her initials surrounded by a stylized wreath and flowers — her company logo.

The business plan wasn't just a creative project, though. It was crafted with the help of her SEA-assigned adviser and was a requirement for the program. First Levine had to make a 10-page "mini" plan, and then a full one. "It was an intimidating process, to be sure, but I am so glad I went through it and I have a lot more clarity now about where I am going, and what sort of services I will be offering," says Levine.

In order to qualify for SEA, most states require that applicants be eligible for unemployment benefits, are unlikely to return to their previous jobs and have a feasibility plan for a viable business idea. Pilot programs like Levine's also offer bi-weekly meetings with a business adviser.

Since starting the program in January, Levine has been required to go through a series of unfamiliar exercises — projecting cash flow, anticipating business expenses and sizing up the competition. "It's intense," says Levine, but she sees the work as key to her success, especially since she has a creative background, not a business one.

Not for everyone

Cameron Keng started his first business when he was 14 years old selling bubble tea mix to shops in his neighborhood in Queens. He ran a brisk business until he was undercut by competitors from China, and that was the first time one of his business ventures failed. Since then, he's started several businesses, from restaurant supply services to a small janitorial firm.

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