No guts, no glory

Sep 26, 2009 — The Sun News

Dawn Bryant

Sep. 26, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- The recession didn't scare folks like Jenny Ward.

Armed with a dream and a game plan, Ward started her own dog grooming business in July -- despite the financial meltdown that made it tough to get a loan, the highest national unemployment rate in 26 years and a real estate market in a rut.

Ward is one of hundreds of entrepreneurs throughout the Carolinas who have tuned out the economic naysayers and built a business from scratch during the worst economy since the Great Depression.

Some were motivated by a life-changing experience. Others were laid off and figured they'd be their own boss. Some just wanted to make their longtime dream of owning a business a reality.

"I finally decided I'd just do something on my own," said Dan Smith, 50, who opened Oldtimers Wholesale Outlet in June after being laid off from a local time share company. "I don't regret it for a minute. ... In this economy, everything is Russian roulette. To me, all you can do is try it."

Fewer people are taking that gamble these days. The number of new businesses seeking loans through the S.C. Small Business Administration fell in the past year, with 143 loans from Oct. 1 through this week, compared with 255 during the previous 12 months, according to the agency.

Along the Grand Strand, though, interest in starting a business has picked up as the economy has suffered, with the local chapter of SCORE, a group of retired professionals who advise business owners, seeing hundreds more potential entrepreneurs this year compared to last, president Bill Cole said. But only about three-quarters of those will actually follow through and get the business up and running, he said.

Paul Thomas, the senior area manager for the SBA for coastal South Carolina, has spent more time in the past year helping existing businesses survive than helping new ones get started.

"It's an interesting time to take that path," Thomas said of entrepreneurs starting a business. "We have seen some new growth, but it has been very, very slow."A strong motivation

Ward wasn't swayed by the negative economic reports when she started kicking around the idea of opening the Canine Cabana. She said something more powerful was motivating her.

The 25-year-old animal lover, who had given up grooming to have a daughter a year ago, gave birth a month early and the baby, after spending two weeks in intensive care in Charleston, died because of heart failure.

Ward said she was devastated. But through the pain, she found inspiration.

"It definitely motivates me, thinking about our daughter," Ward said Wednesday, the one-year anniversary of the death. "Everybody needs motivation. When it's a tough economy, you have to have a drive that goes deeper. She can't experience life for herself, and it made me realize you need to go after what you want in life."

So Ward turned her lifelong love of animals -- she grew up on a farm in Missouri -- into a dog-grooming venture. She and her husband invested $10,000 to get the business started, found a 600-square-foot space in the live-work townhouses at The Market Common and snipped the fur on her first canine customer July 1.

"We've given everything we've got to do this," Ward said. "We are definitely keeping the doors open and doing much better than we thought."

Finding a niche

About 20 miles away in Conway off U.S. 501, Dan Smith pores over the latest merchandise he's received to sell at the Oldtimers Wholesale Outlet.

Smith opened the 4,000-square-foot store and warehouse space in June, about six months after being laid off, fulfilling a dream of owning a business. He figured demand for outlet items would be a good fit for today's tight-fisted consumers and he plans to add more necessity items -- detergent is already a big seller -- to the mix.

"People are only going to buy what they need right now," said Smith, who runs the outlet with his wife, Janice, and 21-year-old son Joshua.

That's crucial for new businesses: Finding a niche that meets consumers' demand, experts say. Entrepreneurs must do their research, know the market and have a solid business plan, advisers say.

"You've got to know what you are doing," said Elliott Cooper, SBA's director for South Carolina. "You don't want to open a snow ski shop in Myrtle Beach."

Seize opportunity

The SBA has approved loans for a variety of new businesses during the past year, including a tire dealer, janitorial service and tour operators.

Getting financing has been one of the biggest challenges for startups, with the financial meltdown making it much harder than it was just two years ago to get a loan. But those who can get the money will find good deals on leasing space for the business and professional services from lawyers and accountants -- a perk created by the slumping economy, Cole of SCORE said.

"Actually, you can get pretty good values out there," he said.

Ward said the low costs on a lease made it possible for her to start the Canine Cabana now.

"If times were good, I wouldn't be able to do it," she said. "It was an opportunity for me."

Smith didn't have as easy a route, facing hefty deposits to turn on the power and water, he said. He wouldn't say how much he spent getting the business off the ground.

"I'm afraid to look" at how much it was, he said. "There are a lot of expenses just getting things turned on."

John Henson, who in July opened Floor Coverings International in Calabash, N.C., with his wife Cindy, said he made sure his new business would make it by keeping his overhead costs low by operating in a small studio and having only floor samples -- not a warehouse full of merchandise. He said he invested $75,000 to get the business going, and didn't have trouble getting financing.

"I didn't have any reservations," said John Henson, who has nearly 30 years experience in flooring. "I just have a lot of faith that the economy will come back. ..."

"This is a good time to start. People are starting to loosen up a bit. We are starting to see things start to move. I'll be there to ride the wave."

Keys to success

Ward, Smith and Henson say they are faring well so far and are able to pay the bills.

All of them run their businesses without employees -- unless you count the relatives who willingly pitch in.

"It's a lot of hours," Smith said. "If you are trying to do something, you've got to work hard at it."

Cole of SCORE says successful business owners start with two qualities: Knowledge and passion for what they are doing. Those who likely won't succeed are those who start a business because they are about to lose their job and can't come up with another way to make a living.

"That's a pretty bad reason to start a business, if it's only because you can't think of anything else to do," Cole said.

Even if the economy isn't on their side, some entrepreneurs say they've got the passion for the work that will help them overcome any hurdle the economy might throw at them.

"People are going to say this and that and speak gloom and doom," Ward sad. "But if you have confidence in it, it's not going to matter what the economy is doing out there."

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ONLINE

Watch a video of Jenny Ward talking about starting a business during a recession at TheSunNews.com.

Contact DAWN BRYANT at 626-0296.

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