Be your own boss
The perils and pitfalls are many, but the timing is good
Mary Kittrelle never expected to start her own business. An M.B.A. student at the University of California-Los Angeles in 1998 during the dot-com boom, Kittrelle watched as classmate after classmate chased new ideas and made pitches to venture capitalists. "I had never really thought of something I would be that passionate about," says Kittrelle, who lives in Hermosa Beach, Calif.
That changed two years ago, when Kittrelle started feeling restless at her job as a corporate finance manager. Always jumping from one assignment to another, she wanted instead to manage her own division. But her job search yielded few results, and she began to contemplate life as a business owner. An amateur wine connoisseur, Kittrelle had noticed enrollment in local wine education classes soar. At one session, "the place was sold out in the first five minutes, and there really wasn't any atmosphere," Kittrelle recalls. "I said, 'This is incredible. There is a huge demand.' " So last July, she handed in her two weeks' notice and began sketching out plans for an upscale wine bar, showcasing the works of local artists, in downtown Long Beach, Calif. She plans to open her doors this fall.
Even though the small-business failure rate is daunting, this is an opportune moment for Kittrelle and other budding entrepreneurs. Low interest rates and a still-soft job market have made capital and employees available at affordable rates. Credit is in ample supply, and banks are looking to lend. Factor in strong consumer and government spending and a pent-up demand for new wares by companies, and the picture becomes even more attractive. "I can't imagine a better time, from a broader economic perspective, to start a small business," says Mark Zandi, chief economist of Economy.com. He also points to strengthening sales figures across most industries as another reason to hang out a shingle now: Competition is less tight as many established firms have all the business they can handle.
Despite the rosy outlook, most new firms will never make it from the drawing board to the real world. According to a study by the Ewing Marion Kauffman Foundation, a center for entrepreneurial research based in Kansas City, Mo., at any given time approximately 10 million Americans are attempting to start their own businesses. Yet only a third of these individuals will actually open one. And a 2002 Small Business Administration study found that while survival rates for small businesses are not as dismal as folklore suggests, only 66 percent of new firms with employees will weather the first two years or more. After six years, only 40 percent are still in operation.
But there are ways to improve your odds. The trick can be as simple as doing your homework: researching possible locations where your business is sure to thrive, building a network of experts to tap for advice and support, securing the necessary funding (story, Page 67), or getting the relevant education or experience. "If you are going to drive on a long trip, you would want to have a map. You would want to check and see where the construction zones are," says Christine Pigsley, who counsels small-business owners at WomenVenture in St. Paul, Minn. "It's the same thing with business."
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