Carson City a fertile ground for businesses to get going

Lots of start-up businesses sprout in Carson City, and the city is home to a very large number of small businesses in comparison with other regions of the United States.

That's particularly remarkable because Carson City doesn't present a particularly fertile environment for entrepreneurs, at least by the standards that a national business publication established a few months ago.

Business Week hired a San Francisco research company to sort through U.S. Census and other data on all cities in the United States with populations from 20,000 to 200,000. From that data " which looked at only a handful of qualifying cities in Nevada " the magazine identified Sparks as the best city in the Silver State for business start-ups.

So where did Carson City fall short?

Northern Nevada Business Weekly dug through the same data as the national publication, and here's what it found:

Carson City residents are an entrepreneurial bunch. In 2005, the last year for which data is available, a new business was launched for every 184 residents of the city.

That's twice as many start-ups per capita than the U.S. average " which is one start-up for every 370 people " and it ranks higher than any neighboring county in Northern Nevada.

And that translates, as well, into a large pool of small businesses. Carson City is home to one small business for every 25 residents. Again, that's about twice the U.S. average of one for every 46 residents.

The bumper crop of start-ups and small business grows in an environment, however, that doesn't appear to favor them.

Economic development consultants, for instance, often look to a demographic group they call "The Young and the Restless" " well-educated workers in their 20s and 30s " as a powerful force creating new businesses.

But in Carson City, that demographic group accounts for only 1.5 percent of the population. That's well under the U.S. figure of 3.8 percent, and it's the lowest in northern Nevada.

A well-educated workforce is often viewed as another key to entrepreneurial activity. About 21 percent of the workers in Carson City have college degrees. The figure is 27 percent nationwide.

The number of folks who work in creative occupations in western and central Nevada, a statistic widely considered to hint at a source of entrepreneurial energy, runs about half the national figure.

And with one college " Western Nevada College " in town, Carson City doesn't benefit from the intellectual ferment that drives economic growth in metropolitan areas such as Boston and Silicon Valley. Nor does the region benefit from a large pool of highly educated foreign-born workers.

But lots of good ideas come from another source: The pool of manufacturing companies that call Carson City home.

In 2007, the U.S. Patent and Trademark Office says, 37 residents of Carson City won patents. Patent applications indicate that a fair number of the inventors work for manufacturing companies in the area.

Market hungry for new, fresh ideas

Rob Hooper, executive director of the Northern Nevada Development Authority, cited the one-stop economic development shop his agency operates in Carson City as one reason for this area's success. The NNDA works with a host of resource partners, including the U.S. Small Business Administration, Service Corps of Retired Executives, Nevada Microenterprise Initiative, and Nevada's Center for Entrepreneurship and Technology.

"The fact that it's here and and it actually works is one of the reasons Carson City is such a great place to develop a business," Hooper said.

Offering this kind of help for free helps small businesses get off the ground, according to Hooper.

"You can get help with your business plan, we can work with multiple agencies to put together funding, and help guide people through the process," Hooper said.

Hooper also noted that the condition of the commercial real estate market is a factor in the current climate.

"There are screaming deals out there for commercial space," Hooper said. "It's a great time to start a business. The market is hungry for stuff that is new and fresh."

Mike Skaggs, executive director of the Nevada Commission on Economic Development, cited the availability of angel investors who provide the earliest funding of start-up technology and manufacturing companies, and venture capital firms that provide the financing that helps companies grow.

No one tracks venture funding in Nevada. The state is home to three groups of angel investors, with one group in Reno and another Incline Village.

But Skaggs thinks informal channels that link well-heeled investors " many of them in the Lake Tahoe area " with entrepreneurs throughout northern Nevada also are developing.

Experienced investors drawn to the state, he says, provide more than money.

"They are the best mentoring group there can be," Skaggs says.

Among the lessons they teach: A tolerance for risk.

"That's the thing that Silicon Valley has," Skaggs says. "Failure is not a black mark. If entrepreneurs there don't have a failure under their belts, you have to question their experience."

Market size is key factor

Dave Archer, chief executive officer of Nevada's Center for Entrepreneurship and Technology, notes that the sophisticated financing tools provided by angel groups and venture capitalists don't make any difference to the vast majority of start-up businesses launched in the state.

Most of them are launched with the savings of individual entrepreneurs " often with the help of friends and family " and they remain small businesses that aren't intended to grow into something larger. Instead, they provide a living for the owners of small businesses and their families.

For those companies, Archer says, the most important factor is the size of the market they serve.

A start-up that doesn't have enough potential customers in its community generally is doomed. As communities in Northern Nevada grow, they're able to support small businesses that would fail in a smaller town.

But if entrepreneurs can find a source of cash, Archer says the current environment is terrific for start-ups.

"Assuming you have the money, this is a great time for renting retail or manufacturing space," he says. "It's a great time to be hiring good people."