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October 22, 2017

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For new entrepreneurs, recession a great time to realize dreams

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Leila Navidi

Cake decorator Nichole Hayashi of Caked Las Vegas bakery works on a cake inside the bakery on Wednesday, August 31, 2011.

Caked Las Vegas

Carolyn Portuondo, owner of Caked Las Vegas, works on a birthday cake at her bakery on Wednesday, Aug. 31, 2011. Launch slideshow »

During the boom years, life for Dwayne Eshenbaugh was good. And now, having lost his job, he’s wondering if it just got better.

An architect at one of Las Vegas’ top firms, Eshenbaugh, 45, said there was no shortage of great projects during the fat years. He had a home in Henderson, a six-figure salary and lived a comfortable life helping raise two daughters.

But when the recession hit in 2008, work dried up, and by October 2009, Eshenbaugh was unemployed.

“I was shocked. It was the first and only time in my life I’ve been laid off,” the UNLV graduate said.

Eshenbaugh was one of tens of thousands who lost jobs because of the recession in Las Vegas, where the unemployment rate sits at 14 percent.

For years, he had dreamed of starting his own firm, going so far as to purchase a website name. But he couldn’t pull himself from the comfort and stability of his job. It took a crashing economy to push him toward his future.

Twenty-two months after he lost his job, Eshenbaugh owns Novus Architecture.

He is part of a robust entrepreneurial movement sweeping the nation. In 2010, nearly 565,000 businesses were started each month, the highest number in more than a decade, according to the Kauffman Foundation, which researches entrepreneurship trends. In Clark County, nearly 4,000 more businesses were active in 2009 than in 2007, although that number has dropped slightly since.

Rob Fairlie, a University of California Santa Cruz professor who wrote the Kauffman study, said the recession is a driving factor in the entrepreneurial surge.

“The job market is still pretty lax right now,” he said. “Because there are restricted … opportunities, people started businesses.”

Owning a small business has its advantages: flexible hours, creative freedom and a deeper sense of investment in its success.

But the challenges of starting and maintaining a business are steep. The job has a way of taking over your life, and many owners end up working longer hours than they did in their previous jobs, they say. There are also the financial and regulatory aspects that must be dealt with, from balancing budgets to marketing to handling customer service. Obtaining licenses and permits is often a complex, time-consuming and expensive process.

“It’s like having a child,” said Carolyn Portuondo, who opened a cake shop in 2010. “You nurture them. You teach them. You watch them grow. And it gets bigger and bigger and bigger.”

Surviving as a new business is difficult.

But people who make it through often find themselves happier and more engaged than before.

Since starting Novus in 2010, Eshenbaugh has worked on projects ranging from bus shelters to custom homes.

“I’m having the time of my life,” Eshenbaugh said. He’s looking for office space so he can move the business out of his home, and hopes to hire more employees.

He was recently offered a job leading the design team at a major Las Vegas architecture firm. He declined.

“I was born for this. I should have done it 10 years ago.”

•••

Don Beckman is no stranger to chasing jobs wherever he can find them. Over the years, the Oklahoma native has worked as a chef, an oil-drilling technician and an electrician.

In 2008, when Beckman lost his electrician job in the San Francisco Bay Area, a friend told him work was available at the in-progress Cosmopolitan in Las Vegas. Beckman moved here.

After five months on the job, the hotel’s owners decided to leave several hundred rooms unfinished, and Beckman again found himself unemployed.

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A view of the Cosmopolitan under construction just north of MGM Mirage's CityCenter project on Friday, March 6, 2009.

He faced a decision.

“I’d decided the economy had gone to hell, and if I was going to take a chance this was the time to do it because I wouldn’t be worse off than 20 percent of the rest of America,” he said.

Beckman, 58, decided to stay in Las Vegas.

He identified solar energy as an emerging field, and decided to start the Solar Institute of Nevada, giving intensive, 40-hour training for workers in the design, installation and maintenance of solar panels.

He had the technical background, but said his business experience harked back to high school when he was an assistant manager at a movie theater. So he turned to the local chapter of SCORE, a nonprofit business-counseling center partnered with the Small Business Administration.

Raj Tumber, a SCORE counselor, said he has seen an uptick in interest in starting small businesses during the recession. But many people haven’t fully thought through their ideas, and are often averse to doing the extensive planning it takes before a business can open its doors.

“Most people stop at the business plan … they don’t realize how involved that is,” Tumber said. “Just because you think you have a great idea does not necessarily mean that you’ll be able to sell your product. You have to find a way to get it out to your customers. That’s what’s important.”

Tumber stresses the importance of spending enough time in the planning process. He said writing a business plan shows owners the feasibility of their idea, and forces them to think about financing, marketing and the long-term sustainability of their business.

Beckman spent almost a year writing his business plan and getting permits to open.

“I knew enough about business to know I didn’t know how to run one,” Beckman. Writing a plan “was a lot harder than I thought. It caused you to do a lot of running around and cross-checking. Actually putting a budget together and seeing how much it’s going to cost for tables and chairs and file cabinets.”

Since opening last year in an office park near the Strip, Beckman has trained more than 100 people to prepare to work in the solar industry installing panels and wiring systems. He is teaching inmates in the Clark County correctional system the ins and outs of solar through a federal grant, something that wasn’t in his initial plan.

He is working harder and longer than he ever did as an electrician to make less money. But he says he is enjoying every minute of it and is confident the business will grow as solar catches on in Southern Nevada.

“I’ve always liked to sleep late, but now I can’t stay in bed past 6 o’clock in the morning. Once my eyes open, the wheels start turning with what I’ve got to do,” he said. “It’s just go, go, go until I’ve decided I’ve done enough for the day … I’m having the most fun that I’ve ever had.”

•••

Jim Clinton is having fun running his new business, too. But it took three layoffs in four years to get him there.

An accountant, Clinton had worked as a controller for construction companies, but kept seeing his work outsourced.

Click to enlarge photo

A construction worker is shown in this file photo from early 2008, when Las Vegas was starting to feel the effects of the Great Recession.

“I decided I needed to be the outsourced project,” he said.

Clinton didn’t go back to working for construction companies. Instead, he capitalized on his passion for nonprofit organizations — he spent much of his free time volunteering — and this year opened Clinton Consulting, a one-man shop that provides financial services and advice to those groups.

“The relationships I established over the last five years were key,” he said. “I was able to go back to those groups and know that they needed the help.”

Working on his own has given him a flexible schedule, allowing him more time to help out around the house and be with his three sons.

But the financial struggles of a young business are stressful, he said.

“I often worry about having enough clients that will pay my mortgage and my bills on a monthly basis.”

In many instances, it makes sense for people to launch a business that’s compatible with their passions — as was the case with Clinton, Eshenbaugh and Beckman.

It just took some time for Portuondo to find her passion, however. The Hawaiian native originally pursued a doctorate in pharmaceutical toxicology, but after working in a hospital, changed her mind and decided to become a pastry chef.

After graduating from culinary school, she found work as a chef at the Venetian and stayed there for three years. But in 2008, she left to spend more time with her two young children and save on day-care costs.

She also used the time to lay the foundation for her business. She worked on a business plan and spent about $5,000 slowly acquiring the mixers, ovens and other things she would need by shopping for deals on Craigslist and eBay. Eventually, she accumulated so much equipment in her garage, her husband told her she needed to sell it or find somewhere to put it to use.

Caked Las Vegas on TLC's - Fabulous Cakes Season 2

Caked Las Vegas

She began scouting locations to open a bake shop, and showed her intuitive business savvy.

“If I went around town and saw potential places, I would stay out there for maybe eight hours. I would count how many people would drive through, how many people would walk in. I would look at the demographics — how many children, how many schools, how close it is to the Strip.”

In 2009, Portuondo settled on a storefront at 9770 S. Maryland Parkway in Silverado Ranch, and in February 2010 opened Caked Las Vegas.

Since then, her business has taken off. She has hired five employees, has been featured twice on the TLC television channel and now finds herself working 18-hour days to keep up with demand. She’s made cakes for Hugh Hefner and Shaquille O’Neal, and often gets work that has been outsourced by casino pastry kitchens.

“I never have enough time,” she said. “If I’m not making cakes, I’m on the phone. Or on the computer. Or making deliveries.”

She said people were skeptical when she decided to strike out on her own at the height of the recession, but so far, it’s working and her business is growing.

“The reason I know that is I’m paying more taxes. That’s a downside ­— I feel like throwing up” when tax season rolls around.

Her thrifty ways and the equipment from her garage have helped her run the business without taking out any loans.

The business has put a stress on her family — her husband still works as a butler and waiter at a casino, and she has less free time to spend with her children. But she has set up a play area in her store for her 5-year-old daughter and 4-year-old son and is doing what she can to make it work.

She credits her success to her planning, and the fact that she handles all of the businesses operations — accounting, answering emails, purchasing ingredients and cleaning.

“It’s a constant struggle every single day,” she said. “It’s a sacrifice but (it’s worth it). It’s mine. I built it.”

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