During boom times, Las Vegans loved to gush about entrepreneurialism in the city. There was seemingly always a new resort being built with a flashiness that topped its predecessors, and a spirit that the entertainment and tourism imagination would always find a way to outpace the city’s shortcomings. But times are tough now, and with our city’s future being questioned on a national level almost daily, it’s harder to see that entrepreneurial spirit in Las Vegas.
Nationally, research firms come up with some interesting ways to evaluate the country’s entrepreneurial rhythm. This summer, the Kauffman Foundation published its Index of Entrepreneurial Activity, which reported that the overall rate of entrepreneurialism grew by 4 percent between 2008 and 2009.
The report indicated that 340 out of every 100,000 adults, or 0.34 percent, started businesses each month in 2009, up from 0.32 percent in 2008 and 0.3 percent in 2007. The figures show 27,000 more businesses per month being opened in 2009 than in 2008.
Vegas’ entrepreneurial vibe doesn’t get this kind of exclusive number-crunching attention. But there are some indicators that show new business creation could be on the horizon.
Approved business licenses in Clark County spiked for fiscal year 2010 after a two-year slumber. Fiscal year 2007 saw 11,130 licenses approved, while 2008 and 2009 were at 9,531 and 9,637, respectively. The number spiked to 11,597 for 2010 as local start-up business consultants are reporting steady or increased traffic.
But it’s the type of traffic that may be a concern.
Janis Stevenson, head of UNLV’s Small Business Development Center, is on track to consult with about 500 people this year, which has been the norm for the past few years. She calls the personalities filing into her office for business advice a group with “odd energy.” They are a mix of laid-off construction workers looking to retool skill sets, ambitious service industry and retail types who have to face the fact that there’s very little credit out there to get their entrepreneurial ball rolling, and a group she calls “the reluctant business owner.” The last group is made up of those who have been laid off and see no other choice but to start a business because of limited job opportunities.
“You can see those people in our two-hour pre-business orientation,” Stevenson says. “You can see them saying, ‘This is not for me.’”
One Las Vegan who does have the drive for business is Ross Dauterive. His patented invention, the Therapy Victory Chair, or TV Chair, is his passion. But he’s also very open about the fact that the endeavor is taxing him on every level.
“It’s one of those things where I wish there could be three of me to do everything I need to do,” he says. The TV Chair helps those with neuromuscular diseases overcome some of their movement limitations.
Dauterive used up one $25,000 line of credit and paid it back. He is about to max out another $25,000 credit line, and hopes a few sales he has in the works will allow him to pay it back to keep him “treading water.” Nonetheless, he wouldn’t have it any other way.
“It’s fun to be an entrepreneur in the U.S.,” he says. “The great thing about the down economy is that I can go to a great welder and get him to help me [build the chair for orders]. During the boom times, they were so busy, they wouldn’t even look at me.”
Cory McGuire, whose Dale Carnegie Training of Nevada franchise is in the Henderson Business Resource Center, admits that you have to be driven and a little crazy to launch a business these days.
McGuire has had her Nevada territory for 14 months. And after spending nine years building her Wisconsin territory, then taking the leap into Nevada, she has no regrets. But she admits that while business is up 90 percent from fiscal year 2009 to 2010 she’s working harder than ever, even giving free initial seminars to companies to try and drum up business.
“Those who make it through these times will be the leaders down the road,” says Rebecca Fay, who oversees the Henderson Business Resource Center, which is affiliated with the city’s Chamber of Commerce.
At the Nevada Microenterprise Initiative, volume from applicants seeking education and information is high, as well. People are kicking the tires, says Anna Siefert, operations manager for the program, which advises 800 people per year on starting their own micro-business. A micro-enterprise is defined as having fewer than five employees and a capital requirement of less than $35,000 for start-up. And with banks not lending money, starting a service-based business from home on a shoestring budget is almost becoming the norm, Siefert adds.
But she says many people wanting to start a business are misinformed about the need for start-up capital.
“Most people think if they can have someone give them money, that will do the magic,” Siefert says. “Most often that’s not the case. People need to understand their market better. … I tell most of them, ‘You don’t need money, you need to do business differently.’”
One man who appears to be throwing good money after good is Mark Brennan, head of the Brennan Consulting Group. He is also a founder of the Vegas Valley Angels, a local venture capital alliance that invests in start-up companies. After selling off the last of his businesses in the mid-2000s, he has spent the past six years almost exclusively helping entrepreneurs get their businesses going. Today, he has several million dollars of his own money in “high-risk” local ventures. These start-ups include a software company, a financing entity and a health-care technology firm.
Brennan looks to do 12 investment deals a year and will see 500-700 inquiries annually, much higher than what he saw just five years ago. He asserts that business is booming and that the entrepreneurial vibe in Las Vegas is alive now more than ever.
“There are a lot of entrepreneurial ideas I’m seeing that wouldn’t have come along during the great times,” he says.
Andrew Hardin, director of UNLV’s Center for Entrepreneurship, has the ambitious goal of becoming a “top 25” entrepreneurship program, despite a shoestring budget and limited resources. He is the third director of the program since it started in 2005, and while he acknowledges challenges, he says predecessors did a good job of establishing industry contacts and laying a foundation.
Hardin oversees the Southern Nevada Business Plan Competition, which is in its second year. The contest is open to the public as well as university students, and has had about 35 plans submitted each year. This year’s submissions are currently being judged, and finalists get feedback from the likes of Brennan and other Valley venture capitalists.
Hardin also has implemented a cooperative effort with the school’s engineering program in which MBA candidates help engineers wrap a business plan around their innovation. Nine of this year’s submissions for the business-plan contest have come from this collaborative effort. Submissions range in scope from solar technologies and a unique trash-can concept to scuba gear and a specialized gun clip.
“Collaboration is very important to help commercialize these ideas,” Hardin says. “It speaks directly to the economic diversification we need so badly here.”