More twenty-, thirtysomethings becoming small-business owners

By Cynthia Hodnett
Green Bay (Wis.) Press-Gazette

GREEN BAY, Wis. — A career in construction gave 34-year-old Doug Schmidt Danforth a good paying job, but it didn't provide him with true satisfaction.

When Danforth had the chance to follow a new career path in 1997, he took a chance with $900 and an idea.

"I knew a little about the area because I had managed two floral shops years before I went into construction and I liked it a lot," he said.

"I also knew that I wanted to control my own destiny. I knew I wanted to be my own boss.

"I walked into Bay Park Square mall (in Green Bay) and I didn't see a flower shop anywhere, and I knew there was a need for one, so I decided to give them a call," he said. "I started with the $900 and I bought some coolers and other equipment, and one of my cousins helped me out with the rent."

A shaky economy plus the desire to chart their own financial courses are among the reasons more twenty- and thirtysomethings are going into business for themselves, said Wayne Corey, executive director of the Wisconsin Independent Businesses Inc., an agency for small businesses.

There are about 22 million small businesses nationwide, according to the National Small Business Association.

Although there aren't any statistics to show how many businesses are owned by those younger than age 35, Corey said an increasing number of people in that age bracket are starting their own businesses.

Starting small

Many, like 28-year-old Yer Vue of Green Bay, start their businesses out of their homes.

Vue had worked in the business management field at a number of companies and developed a clientele from several years of preparing taxes out of her home. Plus, she had a history of working as an interpreter in the Southeast Asian community.

That mix prepared her to offer tax preparation, translation and employee contracting services at her business, Second Hope Translation Service and Second Hope Contracting Service, which launched this month.

"I've worked for other companies, and I didn't always feel accepted," she said. "With my degree and my background, I decided that I could utilize my strengths."

While many may have the dream of owning their business, the reality is that many businesses fail.

More than 570,000 new businesses opened in 2001 and nearly 580,000 closed, according to the National Small Business Association.

Many new business owners, especially those who are younger, don't anticipate the long hours and dedication that are required to get a business off the ground, Corey said.

Nor do many consider that they may not see profits return right away, Vue said.

"The one thing I lacked when I first started is that I didn't have confidence," she said.

"I didn't have enough money. I have the children to take care of. You were used to getting that check every two weeks. But in business, you may not have that, and that's scary."

Full responsibility

"Reality sunk in that this was my responsibility, that this is my life," Danforth said.

"The first two years, I was flat broke. I had no savings, nothing to fall back on. I went from making about $18 an hour in construction to making minimum wage."

The most common problems that many new small-business owners face are the lack of capital and the urge to expand too quickly, Corey said.

"It's going to take them between two to five years to see a turnaround," he said. "If you make it to three years, there's a good chance that you'll be successful."

About 82 percent of small businesses were funded by loans or other credit in 1998, according to the National Small Business Association.

And a number of business owners use their own savings and receive money from family members and friends, and loans from other financial institutions.

Danforth started his business with help from his family.

Others, like Vue, find assistance from programs such as Urban Hope, which provides resources to minorities.

Regardless of what type of businesses they operate, many young business owners said they don't regret their decision to become their own boss.