Excerpt from The Dallas Morning News, December 7, 2001 The Dallas Morning News is Dallas' highest subscription daily Budding Entrepreneurs Go Solo Television production colleagues Kurt Boxdorfer and Terri Howard-Hughes had tossed around the idea of starting a business together for years. The time never seemed right until recently. In September, as the recession deepened and job cuts rained down, the two took the leap and founded Mediaforce Productions, a television, multimedia and web production company in Dallas. "We realized that we were staying as busy away from our full times jobs as we were in them. And we knew we had a good system of workflow," Ms. Howard-Hughes said. At first blush, starting a business in these uncertain times may seem to defy logic. But that's just the kind of entrepreneurial activity that experts expect to see in a recession. As it did in the early 1990s, the downturn is spurring a fresh round of start-ups across Dallas-Fort Worth and throughout the nation. "Most people see it as a moment when everything has come together. They're not risking a steady paycheck, they may have cash from severance pay, they have the ideas, so they say, 'Let's do it,' " said Mike Stamler, spokesman for the U.S. Small Business Administration. "The aversion to risk may have been overcome by circumstances." The SBA said it's been getting substantially more inquiries about how to start a business. Though hard numbers are still coming in, the agency said it sent out 50 percent more informational packets and letters from October 2000 to October 2001 than in the previous year. In the last two months, the Dallas Small Business Development Center said, it has experienced a 125 percent increase in people interested in attending workshops. The room was full at a November small-business start-up class, which attracted more than 60 people who wanted to open everything from a pool hall to a job placement center to a laundry facility. Several were looking into consulting businesses. The organizations help entrepreneurs get small-business ideas off the ground and don't even account for the untold number of people pursing independent marketing, free-lance or franchise opportunities. Apprehension, optimism Entrepreneurial activity has always been robust in Texas, soaring in recent years along with the economy. The growth of the Internet inspired start-ups of all kinds and helped Dallas win recent recognition as the nation's top city for entrepreneurs. But this year's phenomenon is different, born out of a faltering economy that tipped the cost-benefit analysis for many. Mr. Boxdorfer, a 20 year industry veteran, and Ms. Howard-Hughes said they finally decided their expertise in television production was a good basis for a partnership in business. They had worked together for the last few years doing work for a number of local and national clients. A month after the two started Mediaforce, they had separated from their previous jobs and were promoting their new company heavily. "I am strong-minded and decisive when it comes to work," Boxdorfer says. "I decided, unlike Burger King, to 'have it my way!' So I am, and I'm really enjoying the process of building a firm client base and having a chance to grow creatively." The feeling that now is as good a time as any for the gamble has propelled other entrepreneurs. Stan Sutton, who had worked as a corporate cashier at a bottling company in Mesquite, suddenly realized his options were shrinking as opportunities throughout the region slowly dissolved. "I knew I wasn't getting any younger," said the 48-year-old. "Then one day I read a book that asked you to imagine where you'd be in another five years. I wasn't going anywhere, so I said, 'I'm going to take a chance.' " His 8-month-old company, Apage Lawn and Landscaping Services in Lancaster, gives him the chance to at least dream, he said. He's looking at a three-story Victorian home with a detached garage to share with his wife and three children – a tangible purchase with his new earnings. In a good week, he can take home up to $1,000 – double what he had made as a bookkeeper – and that's working alone. With multiple crews, his opportunities are endless, he said. "The best part is that the only person who is going to stop me is me," Mr. Sutton said. Self-employment is not usually an option for someone who is newly unemployed and unable to land a job, said Jeff Blatt, director of the Dallas Small Business Development Center. "It's a pretty long pipeline from coming up with an idea to actually being in business. If you're unemployed, you don't have the financial resources to fund this, and it's going to be difficult to get a loan," he said. Picking up the 'crumbs' Entrepreneurs face daunting debts and doubts in the best of times. But they still take on greater risks in slower times. It occurred after the 1991-92 recession, said SBA economist Brian Headd. New businesses increased by 8 percent in Texas from 1990 to 1993. Once the economy picks up and unemployment drops, people tend to return to work for others, he added. It makes sense to strike when the economy is down, Mr. Headd said. Competitors are often weaker and more vulnerable. "This opens pockets of opportunities," he said. "These crumbs, if you will, wind up being great places for new ventures to start." Syreeta V. McDaniel decided to take the risk and go the consulting route. She announced to her family earlier this year that she'd taken a leave of absence as senior adviser at Ernst & Young to contemplate starting a business. Companies across the nation had started to dismiss employees, the economy was in the early stages of the downturn, and Ms. McDaniel, 28, had just received a promotion and a 15 percent pay raise that left the single woman with a $56,000 annual salary. "My family thought I was going crazy and they started to fly in from Philadelphia to check up on me," said Ms. McDaniel, who opened McDaniel Consulting: Global Business Solutions for Entrepreneurs in Dallas in June. So far, she's earned less than one-fourth of her annual salary since going solo – and that has meant cutting some so-called luxuries such as cable television and automatic voice mail on her home phone. She has found her savings vital. Her most important piece of advice: Savings should include at least three times the bare minimum of what will be needed in one year. "If they don't have enough savings, I don't need to tell them it's a bad time to start a business," she said. If good fortune is on her side, her goal is for the firm to take in at least $76,000. She still wouldn't receive a salary comparable to what she had at Ernst & Young. "I'll build it slowly, but it will be mine," Ms. McDaniel said. © 2001 The Dallas Morning News
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