Want to be an entrepreneur? The first step takes courage

Unforeseen circumstances often propel people to become entrepreneurs

vbridges@newsobserver.comDecember 17, 2012 

  • Entrepreneurship Starting a new business is risky. Only about half of new establishments survive five or more years, and about one-third survive 10 years or more, according the U.S. Small Business Administration. 2009-2010 rate: 340 per 100,000 adults 2011 rate: 320 per 100,000 adults

Char Reed believes the universe pushed her into starting a small business of drawing digital pet caricatures after her car sputtered out as she drove home from work.

That unforeseen circumstance led Reed to become one of the Triangle’s many unintentional entrepreneurs.

Entrepreneurship rates over the past 15 years peaked in 2009 and 2010 at 340 per 100,000 adults, according to the 2011 Kauffman Index of Entrepreneurial Activity, which tracks the country’s new businesses.

That rate declined in 2011 to 320 per 100,000 adults.

More people turned to self-employment during the recession, said Dane Stangler, director of entrepreneurship for the Ewing Marion Kauffman Foundation, which maintains the annual index.

“Mostly it is people who were laid off and in some cases people who were worried that they were going to be laid off,” said Fred Gebarowski, director of Wake Tech’s Small Business Center.

Lately, more businesses have been started by people who are tired of a job in which they have taken on additional responsibilities, Gebarowski said.

Like Reed, Carlo Matos and Aaron and Natalie Miller became entrepreneurs after unexpected circumstances compelled them to start their own businesses.

Here are their stories.

Facebook boosts portraits

In August, Char Reed, 28, received an email from a Massachusetts man seeking to commission a portrait of his St. Bernard. He had discovered Reed’s 2-year-old graphic design and fantasy genre website, which included her pet caricatures. Reed’s car died a week later.

“With the car situation, that was the little push,” Reed said. A push that convinced her to quit her part-time job at Michaels arts and crafts store – which required a 30-minute commute – move in with her parents and focus on building a business around her illustrations.

Reed reworked her Pet Pics website and met with Gebarowski, who advised her to focus her marketing, develop passive income opportunities and target existing customers with a variety of services.

Reed found marketing success through a free Facebook advertising promotion. In the first two weeks, her page likes went from 40 to 300.

Reed, who is now making the equivalent of her part-time Michaels salary, has been swamped with the holiday rush, but is already planning a Super Bowl promotion.

“I could draw your dog or your cat wearing a jersey or a hat, something like that,” Reed said.

Starting over in IT

Carlo Matos knew what was coming when his boss approached him during a 2009 round of layoffs at IBM. After more than a decade with the company, the software engineer lost his job.

“When he told me, it was surprisingly hard,” said Matos, 40, who made about $90,000 annually. “Ten years of your life. You have friends there. You have colleagues. It wasn’t easy.”

Matos called his friend John Brantly, who had tried to get Matos to buy into Batchnet, a company that provides computer support services to small businesses. Using savings, Matos became co-owner and the second employee of the business.

The first year, Matos made about a third of his IBM salary. His wife, an environmental engineer, had access to health care through her job, Matos said.

But there were weeks when Matos didn’t make any money. So he asked the N.C. Division of Employment Security about making an unemployment claim. At first, the agency said he qualified. Later, Matos had to repay the money because the agency said he was employed, Matos said.

People are not eligible for unemployment benefits once they stop looking for work and solely concentrate on their business, said Larry Parker, spokesman for the state agency. In general, eligibility is based on weekly reports about income and job searches.

For Matos, the reality of owning a business quickly sunk in.

“The added responsibilities of actually running the business, that is the big challenge,” Matos said. “The administrative part, trying to market the company, sales.”

Batchnet had an existing client base, but needed to expand to support the owners, Matos said. So the pair partnered with a salesperson.

“We refer him, and he will refer us,” Matos said.

Matos also joined a networking group.

“You get a take on how other people do it,” he said.

In 2011, Matos made about $40,000, he said. But this year, Brantly, who was the salesperson of the two, called it quits.

So Matos, a father of two, started practicing his customer spiel and carried an outline so he didn’t forget anything.

“I keep my head above water,” Matos said. “I am much happier than I was at IBM.”

They built it themselves

Natalie and Aaron Miller started Solid Builders, a remodeling and construction business, after Aaron Miller, 39, was laid off from Langford Construction Co. in 2003.

In the beginning, the business didn’t bring in enough money to support the family, Natalie Miller said.

“We survived because of my job and my income,” said Natalie Miller, a former marketing and event planner. “We lived simple lives and spent our money wisely.”

However, Natalie Miller was able to save enough money to cover the family’s bills for 18 months.

She quit her job in 2007 to build the business and to spend more time with her kids. The Millers created a website, joined Internet directories and a leads generation service and marketed on social media.

Natalie Miller developed a project management process that involved tracking leads and making follow-up calls. She was also the company’s salesperson and customer service representative.

“We saw improvements within the first month, and a huge improvement over a year,” Natalie Miller said. “I helped increase our revenue through marketing and customer relationships, and also decreased our overhead through research and getting competitive pricing.”

Bridges: 919-829-8917

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