Launching Business in Hard Times Has Upside

Here’s an interesting article by Robert Rodriguez of the McClatchy Newspapers. Printed 26 October, 2008

FRESNO, Calif. — The faltering economy, tanking retail sales and a real-estate market rife with foreclosures didn’t keep Ritsuko Miyazaki from launching a ceramic art store. 

“I know some people would think now is not a good time. But you never know. Tomorrow may get even worse, and this is something I’ve wanted to do for a long time,” said Miyazaki, owner of Clay Mix in Fresno. “So why not now?”

Experts generally agree. Despite a tough economic climate, starting a business now has advantages for entrepreneurs with solid business plans, adequate financing and marketable products and services.

“These tough times really force people to practice good business behaviors,” said Melissa Chang, founder of the Massachusetts-based Pure Incubation, a business-consulting firm. “It helps you persevere and understand that difficult times happen.”

Chang acknowledged that there are still huge obstacles to starting under difficult economic conditions, namely tighter lending from banks, venture capitalists and angel investors.

Good business ideas still get looked at, but they are just scrutinized more closely.

“These are different times. And the days where any crazy idea was good enough to start a business are gone,” Chang said.

“Now, people have to really ask themselves: ‘Is this the right business to start, and can it survive this economy?’ ”

Matt Dearing and business partner Greg McKinney, Miyazaki, and partners Dawn Astorga and Jackie Kane believe the time is right.

Dearing is starting Momentum Cycling in Fresno, and he knows his target market.

A veteran of the cycling industry, Dearing is aiming for the high-end aficionado who is looking for the right bike as much as good service.

Dearing knows there are other shops that sell expensive road bikes, but he said what they don’t offer are specialty services, such as personalized bike fittings.

Dearing said he will work with customers to make sure the bike they choose is comfortable and maximizes what they want to do with it, from road racing to pleasure riding.

He said he has spent several months researching the concept and found it’s an emerging trend in the industry.

“No one around here is doing anything like that right now,” said Dearing, whose shop is expected to open in January. “I think it is going to be big.”

Miyazaki opened Clay Mix in May. The retail store sells art and clay supplies and includes a studio. Her concept is an answer to limited options for people looking for high-quality clay and ceramic supplies.

“I was a frustrated customer, and I was waiting for someone else to start this business. But no one ever did,” she said. “So I took the opportunity.”

She spent more than a year refining her business plan and secured financing from a bank.

Along with selling clay and supplies, Miyazaki’s store showcases the work of ceramic artists from the area. The studio is used for adult classes and children’s parties.

And she is trying to market the space to companies to use for team-building exercises where employees learn how to create pottery.

“I am always thinking about how to make this business work,” Miyazaki said. “And in this economy, you have to be creative.”

Charlett Nilan, a consultant with the Central California Small Business Development Center in Fresno, said a trait of most successful entrepreneurs is that they find niches that aren’t being tapped or are underused.

“You have to determine if there is a need for what you are trying to sell and how much will people pay for it, especially in an economy like ours,” Nilan said.

Astorga and Kane founded Revival Diversified Industries, a Visalia, Calif.-based start-up manufacturer that will use glass to make products such as beach sand, landscaping mulch and art glass. They are securing financing.

They said they have an edge: A slumping economy makes their venture attractive to local governments eager for economic development and that could provide financial incentives.

Astorga estimated the company could create between 30 and 50 jobs.

She said she especially wants to provide jobs to women who are trying to put their lives back together.

They are banking on the growing need for cities to reduce the amount of waste that goes into landfills — all of their product could come from recycled glass.

“I really believe that if you start out lean and can grow in a bad economy, that you have a huge advantage over other companies when the economy improves,” she said. “We will be that much stronger.”

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