Big dreams small business: Even in recession, entrepreneurs taking the leap into home-based ventures

It's 10 o'clock at night and Mindy Miller is carefully measuring sugar, Karo syrup and water into a large pot in the kitchen of an Arby's restaurant in Minden.

Miller's negotiated a deal to use the kitchen during off hours to make her toffee, cookies and other goodies.

She lost her job at a local glass shop this past summer and a few months later her husband lost his job selling cars. They turned to her locally famous toffee as a way to pay the bills. Tahoe Toffee is already in more than two-dozen retail outlets in the state and it's proving itself a sweet success.

Miller is one of scores of Nevadans who are seeing unexpected unemployment as the perfect impetus to take the leap into entrepreneurship. The non-profit marketing group Made in Nevada has had a banner year. They boast 133 members, 20 new since July 2009.

"Unemployment is a funny thing," says one of the group's founding directors, Lynette Castillo. "Everyone wants to be their own boss. Nevada offers the right business climate for it, and those who believe in their ideas are making it happen."

Facing reality

Nevada is facing double-digit unemployment. Credit is tight for businesses, households, banks and other lenders. But small businesses, most with just a handful of employees, represent 87 percent of all businesses nationally and in Nevada. They may not be the big employers, but they are an important part of the economy.

Many people consider the idea of starting a business on their own. For some like Miller, necessity during challenging economic times is what pushes them to do it. Making it work is like putting a puzzle together. The pieces have to fit, and that means everything from the idea to the business plan to the funding.

"Funding is tricky right now," says Deborah Prout with the Nevada Microenterprise Initiative, which funds small businesses starting up.

"We have to see that someone is serious about their endeavor and that they have thought it through. We are taking a risk on them and we want to know they understand their real start-up costs and what it will cost to maintain their business month to month."

According to Prout, the average loan awarded by the Nevada Microenterprise Initiative two years ago was $5,000. She says now many applicants request the $35,000 limit.

"We help a lot of people sift through ways to make their ideas viable here," says Ron Jorgenson, director of counseling programs for the Small Business Development Center at University of Nevada, Reno.

"In the past, a lot of new start-ups took money out of their homes, but the housing market is a huge risk right now. Credit for small businesses has dried up, making it hard for those without a track record even to borrow short term," Jorgenson said.

Because of that, a lot of Northern Nevada businesses begin as home-based ventures.

Rob Hooper, the executive director of the Northern Nevada Development Authority in Carson City, said entrepreneurs could have an even better chance of success in a business incubator.

"When you have an organized incubator function, the chances for success for a startup go from 45 percent to 80 percent," Hooper said. "It just about doubles the chance that a business is going to be successful."

Independent Spirit

According to some business groups, Nevada offers a friendly environment to new businesses.

The Small Business and Entrepreneurship Council recently ranked Nevada as having the best business climate in the West because the state is business tax friendly. Nevadans seem to have what it takes to start at home and grow slowly.

"They do it on a shoestring," Castillo says. "I've seen it time and time again. Starting in their own kitchen; working at home until they have the money to grow; building from the ground up. And it does seem to be a trend."

Christy Virden, the president and CEO of the Carson City-based Women Entrepreneurs of the World, said more and more entrepreneurs are finding new ways to grow their businesses in the down economy.

"Entrepreneurs are basically grasping onto that niche market idea, marketing differently and because they're small and they don't have as much overhead, they are able to charge proper prices that the customer is willing and able to pay," Virden said.

It's working for Miller and her Tahoe Toffee. It's also working for Guy Shields of Stead. A cabinetmaker of 30 years, he lost his job when his trade became more of a luxury than a necessity. To pay the bills, he has turned to cabinet repairs and now uses his skills to create heirloom quality custom-built baby cradles, hope chests and furniture. He's even applying for a patent on a better mousetrap.

"It's a mouse house, really," he says. "The mouse enters through a little hole and the trap's inside. It works!"

They may be the smallest businesses around but they all represent ideas people believe in. Entrepreneurship isn't for everyone, but it's paying off for a lot of independent Nevadans who are giving their dreams a chance and getting the chance to be their own bosses in the process.

Nevada Appeal reporter Brian Duggan contributed to this story

Entrepreneurial Help

Have a good idea for starting a business? Thought it through? Made a realistic plan? Ready to take the leap? If so, there are quite a few places to turn for help.

Small Business Development Center at UNR

This center is a statewide program offering resources on everything from helping you assess ideas to writing business plans to finding funding. www.nsbdc.org

Nevada Microenterprise Initiative

NMI is a non-profit community development financial institution. They offer funding up to $35,000 for start-ups and expansions. www.4microbiz.org

Made in Nevada

Made in Nevada is a non-profit marketing group focused on small entrepreneurial businesses in Nevada. Memberships start at $50. www.madeinnv.org

SCORE

Workshops and individual counseling for people considering a small business as well as owners of existing small businesses. 784.4436. www.score-reno.org.

Nevada's Center for Entrepreneurship and Technology

NCET has a specific mission to connect Nevadans with the resources they need to start and grow businesses.

NCET will conduct an Entrepreneur Expo on March 12 at the Atlantis Casino in Reno. For information, contact Emily@NCET.org

General info at: www.ncet.org

Would-be entrepreneurs flock to groups that provide counsel

By John Seelmeyer

Northern Nevada Business Weekly

As jobless workers - or workers who are worried about their futures - decide by the hundreds to launch their own businesses, groups that provide counsel to startups scramble to keep up with demand.

Judith Hepburn, area manager for the Small Business Administration in Reno, says anywhere from a third to a half of the calls she fields these days come from people looking for guidance in launching a business.

"They need someone to help them with the business plan, and they need someone to see if the idea is feasible," says Hepburn, who refers entrepreneurs to SCORE and other counseling groups.

SCORE, a cadre of retired business executives who volunteer to counsel small businesses, draws a full house to each of the orientation workshops it offers to potential small business owners in the area.

Judy Haar, chair of SCORE's northern Nevada chapter, says the group offers the free two-hour workshops three or four times a month, and registrations fill quickly.

Subjects in the workshops range from personality assessments of successful business owners to a quick overview of business planning.

The workshops, Haar says, provide enough information to dissuade some would-be entrepreneurs from taking a step that might end in failure. Others remain undaunted, but get a hard slap from the economy as they often learn that they can't tap bank loans, credit cards or home-equity lines for startup capital.

"The problem becomes money," Haar says. "Money isn't available."

SCORE's 41 volunteer counselors work with about 2,000 companies a year, and the surge in demand for counseling has led Haar to voice an urgent call for more volunteers.

"We're looking for some good counselors, and we're looking for them now," she says.

The Nevada Microenterprise Initiative, which makes loans up to $35,000 to small businesses, saw its lending grow to $769,000 in 2009 from $688,000 a year earlier.

"The big driver has been existing businesses that can't access working capital in any other way," says Deborah Prout, the nonprofit's president and chief executive officer.

Still, she says 42 percent of the 47 loans the microenterprise initiative made last year went to start-up businesses.

The potential entrepreneurs seeking counseling services from Nevada Microenterprise Initiative also has risen dramatically in recent months, Prout says.

Like SCORE volunteers, counselors at the microenterprise group try to caution entrepreneurs about the challenges of opening a business - particularly a restaurant or a retail establishment - during a difficult recession.

"A dream deferred doesn't need to be a dream denied," Prout tells them.