Source: Laura Petrecca, USA TODAY
USA TODAY asked people who wanted to start a small business to be part of the USA TODAY Small Business Challenge, a six-month series that would follow their progress from having an idea to making the first buck. Nearly 1,800 people applied; they came from every state — and a few from abroad.
For the next six months, USA TODAY will follow the chosen five groups of entrepreneurs from across the country as they navigate starting their own small businesses. Along the way, the entrepreneurs will discuss their progress, challenges and opportunities with three small-business experts and post their video highlights. The participants are not required to take the experts’ advice. On the first Monday of each month through July, we’ll update the entrepreneurs’ progress in print and online. Though no winner will be declared, you can vote for the entrepreneur you think is "most likely to succeed."
We are a nation of dreamers.
Some of us yearn for an idyllic life as a novelist, shaping a story in a quaint country house. Others hope to wake up in a swank city apartment and take a company-paid town car to a top financial firm.
Still others want to be like the millions of entrepreneurs who had the guts and drive to push their big ideas into businesses that they own and operate — beholden only to themselves and the customers they cultivate.
Remarkably, even in dire economic times, the desire to own a small business doesn’t diminish. Annual business creation in the U.S. has remained consistent for nearly 30 years, even during downturns, according to a new study from the entrepreneurship-focused group Ewing Marion Kauffman Foundation.
"Entrepreneurs are not easily discouraged," Kauffman CEO Carl Schramm says. "In boom times and in tough times, roughly 600,000 firms are formed every year in America — about one per minute."
Even the harsh climate of the past two years, the worst economic crisis since the Great Depression, hasn’t smothered such aspirations. Credit has evaporated and consumers have closed their wallets, yet hordes of potential business owners still possess a can-do attitude. Even knowledge that about half of small businesses will fail in their first five years is often not a deterrent.
"For a lot of entrepreneurs, when they have an idea, it becomes a passion, almost an obsession," Schramm says. "They cannot not do it."
The push to start a business is varied. Some decide after a layoff that they never want to report to another manager again. Others want to turn their passions — quilting, genealogy research, book collecting — into full-time vocations.
Last fall, USA TODAY published a six-part series about starting a business and asked prospective entrepreneurs to submit their business ideas for the Small Business Challenge, a six-month series that would follow their progress as they moved their businesses from ideas to making the first buck. Nearly 1,800 budding business owners responded, pitching ideas displaying ambitiousness, earnestness, smarts and yes, even misguided drive and planning. Five have been selected, and their start-up journeys will be chronicled by USA TODAY starting today.
WINE BAR: Passion for vino leads Michael Matthews to open a new business
PEANUT SELLERS: Airport bar leads entrepreneurs Hughes, Goldberg to mixed nuts
VACATION RENTALS: Layoff prompted Kathy Standage to pursue something new and exciting
HOME INSPECTOR: Threat of pink slip motivated Carl Edmunds to start a business
BOTOX PROVIDER: Dr. Susan Riegg sought less stress, more control over her life
Among the hundreds of submissions: restaurants, a tattoo parlor, an Italian ice pushcart business, a dog-poop-scooping service, an iPhone app-creation firm, a tanning salon, an Easter egg dying kit targeted to dog owners, a tourist-photography business, a line of feminine-looking gun cases targeted to women, and an "ultra-thin, liquid nipple cover" that would help prevent chafing from workout clothes. Contenders covered all ages, ethnic backgrounds and geographic locations.
The range of sophistication and — in some cases the lack of it — does not surprise experts. The entrepreneur coaching groups Score and the Association of Small Business Development Centers, which combined help more than a million people a year, say they regularly see clients who have a wide range of ideas and skills.
But it’s enthusiasm that often stands out more than any other characteristic. That’s expected among entrepreneurs, says Rick Wade, the U.S. Commerce Department senior adviser and deputy chief of staff.
In general, Americans are hopeful, he says: "It’s at the core of who we are."
But he stresses that small-business owners, in particular, "have a different kind of drive."
"They’re accustomed to overcoming obstacles," he says. "I don’t know of any start-up that didn’t have a challenge."
Meeting these challenges gives entrepreneurs the inherent knowledge that they will be able to survive hard times. It’s the mind-set of "we fall down, but we are going to get up," he says.
Up-and-down emotions
When Carl Edmunds’ division at a corporate printing company was on the potential chopping block, the West Windsor, N.J., resident morphed an interest in household repairs into a new career as a home inspector and energy use auditor.
"It’s time to take control of my own destiny!" Edmunds, 56, wrote in his submission to USA TODAY. "I will not continue to live in constant fear of the inevitable arrival of the proverbial ‘Pink Slip.’ "
Edmunds’ business, NuVision Inspections, is one of five start-up firms that USA TODAY will follow for the next six months. The others: a wine bar in Gainesville, Va.; a high-end property rental service for homes in Vail and Golden, Colo.; a Botox-provider in Mequon, Wis.; and an all-natural butter-toffee-peanut seller in Orlando.
Although each business is beyond the idea stage and through initial struggles, the neophyte owners will continue to experience the self-fulfilling highs and gut-wrenching lows that come with self-employment.
Running a business is "an extremely messy process," says Dane Stangler, a senior analyst at Kauffman.
"We may boil it down to business-plan-writing at universities," he says. But it’s not that simple. "It’s one step forward and one step back, and then some side steps."
Edmunds has been mentally taxed as he has taken six different licensing tests in two months, as well as insuring and incorporating his new firm. Tasks such as developing a company website have been placed on the back burner.
"I’ve hit a lot of stumbling blocks," he says. "I had no idea how difficult this would be."
Yet, on Jan. 12, he received some uplifting news: He passed a vital home-inspection exam. With that final license secured, he should be able to launch his business in time for the spring real estate push.
"I’ve always wanted to be my own boss," he says. "I can work out of a little 8-by-8-foot office in the back of my house and a pickup, and be happy."
A long road
Start-up accomplishments come in many forms, such as getting a website’s e-commerce function to work, creating a high-impact marketing campaign and even persuading a potential distributor to take a chance on novel new products.
But for new business owners, rejection and unexpected obstacles will come with the territory, Stangler says.
Each year, home-shopping giant QVC gets pitched hundreds of thousands of ideas from hopeful business people. Yet only about 15,000 new products will get on the air each year. (Another 45,000 products come from existing suppliers.)
The long odds also come into play at TeleBrands, the infomercial seller of products such as the PedEgg foot callus remover, Pedi Paws pet nail trimmer and Stick Up Bulb wireless light bulb. TeleBrands receives about a thousand product pitches from entrepreneurs annually but typically markets only four or five new products.
"The majority of ideas — the majority of products — do not sell commercially," CEO A.J. Khubani says. "Take Thomas Edison: He had over 1,000 patents to his name, yet how many were commercially viable? We only know of a few."
Small stumbles and all-out defeats are common for entrepreneurs. Yet, one way to work around those pitfalls, besides learning from past mistakes, is to heed advice from others.
"Everyone has a dream," says Doug Rose, QVC head of programming and marketing. "But if you’re really, really wise about how to develop it, you’ll listen to feedback from others, and you’ll welcome it, even if it’s hard to hear."
Rodney Hughes, a USA TODAY small-business challenger who is selling the butter-toffee peanuts, knows what it’s like to see entrepreneurial dreams crumble. One of his past businesses, a printing shop in Tennessee, went under in the economic downturn after the Sept. 11 terrorist attacks.
"It was one of the roughest times of my life," he says. "But I learned some lessons."
Among them: Don’t rely on one client for most of your business. Hughes had one buyer who represented 70% of his sales, and when that buyer stopped purchasing printing services, it had a dramatic effect on his business.
Hughes has a more cautious path to entrepreneurship now.
He holds a full-time job working in business development at the Metro Orlando Economic Development Commission but has invested in other firms such as a bar in Orlando.
He also took some of the pressure off himself by partnering with friend Lee Goldberg and several others to start the nut line. So far, the venture has had its share of setbacks, but the group also is proud to have created a logo and aggressively seeded online media with mentions of their brand.
Successful entrepreneurs learn to balance the good times and bad.
"The most important (trait) is resilience," says Kauffman’s Stangler. "It’s about not giving up hope."
Hughes and his peers at Poppa D’s haven’t sold their first commercial bag of nuts, but they still have confidence.
"For us, it’s just the fact that we feel in our hearts that we can make this work," Hughes says.