Can’t land a job? Create your own
Turned out of the corporate world, entrepreneurs find a way to make a living
Posted: Sunday, May 24, 2009
They’ve left big salaries for uncertain wages and traded corner offices for garages and spare bedrooms.
As the recession has made layoffs common and job openings scarce, more workers are replacing the corporate world with the freedom – and risks – of starting their own businesses.
Many say they’re drawn because of the earning potential, the chance to be their own boss and the opportunity to follow a dream. Others are starting a business because they’ve lost their job or fear a layoff is imminent.
“There’s a significant contraction, especially in six-figure jobs,” said John Brader of Focus Four Inc., a coaching firm that advises business owners. “There’s less opportunity to go into those jobs right now. It’s waking a lot of people up.”
Brader, who started the firm after a two-decade corporate career, has lunch several times a week with workers, particularly bankers, toying with the idea of starting a business. Many clients have launched new ideas even before leaving their old jobs, just in case, and a new company program that counsels budding entrepreneurs has been a hit, he said.
The number of people creating new businesses rose nationally last year as the recession deepened, according to a study released this month.
The Kauffman Foundation study showed an increase in new ventures with lower-income earning potential, such as child care and retail services, suggesting people are creating jobs more out of necessity to make living than out of a great business opportunity.
In Mecklenburg, 205 new businesses were created in April, slightly more than in March, though that activity was down 16 percent the first four months of this year over the same period last year.
Starting a new business involves serious risks, experts warn. About a third of businesses fail within the first two years, and nearly 70 percent fail within seven years, according to SCORE, a nonprofit organization that helps launch small businesses.
Thanks to the recession, it’s difficult to get loans, and consumers aren’t spending as much as they did in better times.
Yet new business owners say the payoff can make it worthwhile.
37, South Charlotte
New business: Co-founder and partner of Moonlight Creative Group, a full-service advertising agency that does everything from marketing to Web design and works with businesses in fields such as health care and education. Started in 1996.
Old job: Graphic designer in the internal marketing and communications department at First Union with Moonlight co-founder Karen Ponischil.
How they got started: The pair started Moonlight on the side in 1996. A few months later, the bank restructured, eliminating its internal marketing department, so Newsome and Ponischil started their company full time. First Union was one of their first customers.
How it’s grown: Moonlight’s first office was a spare bedroom in Ponischil’s home. Now, the company has a 1,700-square-foot space in Dilworth, with three full-time employees and two part-timers. The company has evolved from a graphic design firm to full-service marketing communications agency.
Last year was the company’s best, with business up 30 percent over the year before, and this year is on track to surpass it, Newsome said.
Biggest challenge: “Learning the ins and outs of actually running a business,” from keeping the books to marketing themselves, Newsome said. Advice from SCORE and mentors helped, she said.
Where the money came from: “It’s called credit cards,” Newsome said. The company was self-financed, but Newsome and Ponischil just needed computers to get it going, she said.
Best thing about owning a business: “Freedom,” Newsome said. “The freedom to set your own schedule, the freedom to determine what type of client you want to work with … kind of having control of your own destiny.”
Most important lesson learned: Keep marketing yourself, she said. Get involved with community groups and nonprofits and participate actively.
Goals: They hope to add another employee or two and continue to add clients.
Other thoughts on entrepreneurship: “I always told myself I would never have my own business, because I saw what (family members) went through, but now, I would never go back,” Newsome said.
42, South Charlotte
New business: Floor Coverings International, a residential carpet, tile and wood flooring franchise in southwest Charlotte. Started in early 2008.
Old job: Started at General Electric and worked in manufacturing for 10 years in Indiana. Winslow moved to Charlotte and worked in the consumer real estate business at Bank of America, then left for a job at Wells Fargo in Iowa, where he worked as a senior vice president of business integration. At the beginning of 2008, his wife took a job in Charlotte, and he left the bank.
How he started the business: Winslow interviewed for jobs in Charlotte, but he always wanted to do something on his own, he said. He enjoyed remodeling and was remodeling his home at the time, he said. He enlisted the help of a business broker who mentioned Floor Coverings International. Winslow researched the company, liked its focus on customer relationships and bought a franchise.
“It was more about how passionate I feel about building something truly different,” he said.
How it’s grown: Business has climbed steadily since it started last year, and April was a record month.
“The economy has played a role, but a lot of flooring companies have closed, and we continue to grow,” Winslow said. He has one employee and is looking to hire two designers.
Biggest challenge: Learning the business. Winslow had no flooring experience, but wanted to learn enough to explain the process to customers. He also had to learn about accounting, human resources and other parts of the business – and when to get help from experts in those fields.
Where the money came from: Winslow had good credit and a solid business plan, so it was fairly easy to get financing, he said. Some of the money came from financing, and some was his own, he said.
Best thing about owning a business: “It’s a lot of work, and you’re on call 24/7, but it’s different when you’re trying to build something on your own,” he said. “It’s a nice feeling to actually build something with your own hands.”
Most important lesson learned: Make sure you have a solid business plan, and stick to it. Ask yourself where you see yourself in a year. “You’ve got to have a strategic plan and road map to get there,” he said.
Goals: Winslow might eventually sell the business, but he plans to own it for at least a decade. In the next three years, he wants to add a team of designers, production and installation crews and outgrow his current space.
Other thoughts on entrepreneurship: Owning a franchise is a good option for a first-time entrepreneur, Winslow said. Floor Coverings International has helped with marketing, IT and other tools.
New business: Red Line Automotive, an auto repair shop in Indian Trail. Started about two months ago.
Old job: Searcy has been a mechanic for 15 years. He spent the past 11 years at an independent repair shop in north Charlotte.
How he started the business: He and a coworker had talked about it. Two months ago, the coworker called and said he’d found a building with a decent location and fair rent.
“I decided that if I didn’t take the opportunity, I couldn’t complain about where I was,” Searcy said. “I just went for it.”
How it’s grown: Searcy and his business partner, Scott Dickson, have spent the past two months turning the building into a repair shop. They moved in two weeks ago and have begun spreading the word. He and Dickson are the only employees.
Biggest challenge: Overcoming his fears. “I have two little children and no insurance,” he said. “… This could take everything I have.”
Where the money came from: Dickson had some of the tools and equipment from a shop in his house, Searcy said. The partners pitched in equal amounts, opened an account and got a $10,000 line of credit. Searcy said he’s living on savings until the business turns a profit.
Best thing about owning a business: “I came from a place where I was very unhappy,” he said. “Whether this works out or doesn’t, I can already tell: It’s the best thing I’ve ever done. I can at least say that I tried.”
Most important lesson learned: Starting a business takes a lot of work, from upfitting the building to marketing. “I’ve learned there’s a lot more to it than I thought there was,” Searcy said. “Everything to me is a learning process.”
Goals: “I don’t want to get rich doing this. I just want to make a living,” he said. “I want a place where we can have good service and take care of our customers. I want to have a good name and treat people right.”
Other thoughts on entrepreneurship: “I’m not just a worker for someone else,” he said. “The days are already brighter days.”
New business: Martinizing Dry Cleaning, various locations in Huntersville area. Opened first location in February 2007.
Old job: Lambeth worked in the Hanes division of Sara Lee for about 20 years.
How he started the business: In 2005, the company announced it was going to spin off its apparel business, and Hanes was offering voluntary buyout packages. Lambeth took the buyout.
He knew he didn’t want to look for another job, so he decided to buy a franchise. He consulted with a franchise broker and settled on Martinizing, which had a strong name, no lawsuits between franchise owners and the company, and a solid business model, he said. He signed the agreement in summer 2005.
How it’s grown: Lambeth agreed to open 10 dry cleaners by 2012. He opened his first in February 2007 and has since opened three more. He has 20 employees, and last month was a record month for sales.
“I thought that, at my age, it was going to take a long time to find something, and I didn’t think I could make the same income I’d been making,” he said. “I’m not there yet, but I see the potential.”
Biggest challenge: “You are truly everything when you go into business for yourself,” Lambeth said.
Where the money came from: Lambeth had enough money saved to start and advertise the business, he said.
Best thing about owning a business: “It is a feeling of just absolute liberation,” he said. “The only people I really have to answer to are customers and the bank.”
Most important lesson learned: Picking the right employees is key. Now, Lambeth advertises openings on Craigslist and gets 40 to 50 resumes a day. “That allows you to really be able to identify and select people with a higher probability of being better at the job,” he said.
Goals: “Right now, my wife and I plan to keep it until we die,” Lambeth said. But he wouldn’t be opposed to selling the franchise if the price was right, he said. In the near future, he plans to add more stores and expand into Mecklenburg and Cabarrus.
Other thoughts on entrepreneurship: “Know what you’re getting into, plan it out real well, plan what’s going to happen in the future … and just jump.”