Out of work? Some strike out on their own as entrepreneurs
| Friday, Mar 27 2009 08:16 PM
Last Updated Monday, Mar 30 2009 04:21 PM
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Resources for aspiring entrepreneurs:
Greater Bakersfield Chamber of Commerce: (661) 327-4421 or www.bakersfieldchamber.org
The Ewing Marion Kauffman Foundation is the nation’s largest entrepreneurship research and policy foundation: (816) 932-1000 or www.kauffman.org
The Service Corp of Retired Executives counsels aspiring entrepreneurs and helps them develop business plans. Book free counseling sessions through the Greater Bakersfield Chamber of Commerce: (661) 327-4421or www.score.org
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Russ Johnson is the owner of Firehouse, a sports bar and restaurant on White Lane, east of Gosford Road. He was laid off from a job working for a home builder and decided to open this establishment a few weeks ago.
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After more than a decade with a home builder, Russ Johnson found himself out of work.
It was 2007. The real estate market had gone belly up, and his employer didn’t need a vice president of land acquisition anymore.
So Johnson decided to change careers. Earlier this month, he opened Firehouse, a new firefighter themed restaurant in southwest Bakersfield.
“In a way I was in better shape than a lot of my co-workers, because I already had experience with family-owned businesses,” he said.
Johnson’s family owns sports bar The Corner Pocket and pool table retailer Billiards and Barstools.
He follows in the footsteps of some venerable names in business. Tom Stemberg founded office supply retailer Staples after he lost a job with a supermarket chain. Billionaire New York City Mayor Michael Bloomberg launched Bloomberg News after he was fired from Salomon Bros.
In almost every economic downturn, entrepreneurship has spiked.
If nobody will hire you, there’s strong incentive to create your own job. Plus, the risk of failure is greatly diminished. It’s one thing to leave a secure job with benefits to strike out on your own, but if you’re sitting around watching daytime TV, what do you have to lose?
It’s too early to know if historic patterns for entrepreneurship are holding up in the current recession, but there’s preliminary evidence pointing that way.
The city of Bakersfield saw new business licenses rise 53 percent from 18,306 to 28,020 between fiscal years 2005-06 and 2007-08, the last year for which data are available.
Kern County had an unemployment rate of 14.7 percent in February, compared with 10.9 percent statewide and 8.1 percent nationally, according to the California Employment Development Department.
Oildale resident Edward Rupe, 43, is among those out of work after losing a job as a sandblaster and painter.
He hated it, anyway.
“You breathe sand and paint all day,” Rupe said. “It’s terrible for your health.”
Rupe couldn’t find another job. But he had saved a lot when he worked, and used the money to buy a tow truck.
Now Rupe is just a $200 motor carrier permit away from launching his new company, Another Tow Truck.
Rupe isn’t sure how he’ll come up with that last $200, though. He spent all he had on the truck, and banks aren’t too generous with credit these days, especially for someone out of work.
The credit crunch is the wild card that could stymie small business growth, which many believe will lead the nation out of the recession.
Small businesses are the nation’s leading creator of jobs, and over the last couple of decades, big corporations have moved from doing internal research and development to largely acquiring research by buying small, cutting edge companies.
Johnson, of Firehouse, said he’s not sure he could have launched his restaurant — or created 65 hospitality jobs — if he hadn’t had severance pay, home equity to leverage, and friends and family members willing to invest both time and money.
Because of all that, he didn’t have to go to a bank.
There’s no doubt the economy is hurting entrepreneurs, but “it’s not clear how much of that is due to the credit crunch and how much is because small businesses just don’t want to take on debt right now,” said Tim Kane, an economist with the Kauffman Foundation, which studies and tracks entrepreneurship.
The credit crunch shouldn’t hinder innovation, Kane said.
“Most start-ups have a pretty long runway,” he said. “They’re in the entreprenuer’s mind for a pretty long time. So, you stay in the product development phase a little longer. Maybe tinker in the basement a bit more.
“But if you launch a year later than you would have liked, the economy might be better, and market demand will be stronger.”
The more critical barrier, in Kane’s mind, is taxes, red tape and labor and immigration policies. He’d like to see procedures streamlined so that entrepreneurs aren’t smothered by bureaucracy.
Locally, that hasn’t stopped folks from dreaming.
Six months ago, the Service Corp of Retired Executives, or SCORE, had so much demand it doubled the days its volunteers counsel aspiring entrepreneurs at the Greater Bakersfield Chamber of Commerce.
“Most of the people who come in don’t have any business experience and are a long way from launching anything,” said SCORE counselor Hugh Williams.
“But they’re thinking about it.”
