We’re perpetually intrigued by entrepreneurs willing to roll the dice and start a business in bad economic times. In prior posts we’ve focused mostly on data and haven’t done enough to explore the stories of individual entrepreneurs.
So today, we’re highlighting Greg Jenum, who’s going for it. If you’re in the same boat, you’ll see yourself in his story. If you’re thinking about taking the leap, you’ll find something of a road map.
Jenum, 42, was laid off last summer. He’d been working in sales for a metal fabrication company west of the Twin Cities. After he was cut, he spent several months looking for another sales / operations management job, “but came up with nothing.”
What he did have, though, was a degree in industrial engineering and an idea.
Six months before the layoff, he’d started a part-time business out of his basement creating specialty, heavy duty tarps, including fitted coverings for catamarans.
He had some history in this area. “I have worked in manufacturing companies since I was a teenager. My dad is a partner in a similar heavy duty sewing company. That is where my background in this type of manufacturing comes from.”
So the layoff brought an opportunity — a chance to take a trade he knew well and build it into a business.
His company, Atomic Tarp, is running now out of a shop on Highway 7 east of Hutchinson.
We asked him to share a few thoughts about the challenges. “Doing all the work myself,” was the first thing he mentioned.
Then he clicked off some more.
I think I was prepared for it but it takes a lot of organization and planning being everything from the janitor, to production, to the president. I am self taught in most of the things I do, including learning to sew.
Marketing and getting the word out on the company and our capabilities. I have created and manage my own website. My younger brother designed the logo and helped setup the initial site.
Living lean and supporting a family of 7 (5 boys ages 14 -4). My wife has a part time job at the middle school.
I have spent the past 10 years or so moving myself into different positions within companies (Engineer, project manager, operations manager, sales, marketing) to give myself the experience of eventually owning my own company.
So the first thing to take away from Jenum’s experience in starting a new business — do something you know.
The second thing to take away: Find a local funding partner.
Jenum said about 70 percent of the funding for Atomic Tarp was done through a local bank. The remainder came through a less likely source: the Southwest Initiative Foundation, a non-profit that among other things makes micro loans of up to $35,000 to businesses in western Minnesota counties.
The foundation loan helped him move the business out of his basement and into a shop and buy more equipment. It’s also provided him with a business consultant once a month with classes throughout the year.
Bernadette Berger, the foundation’s micro enterprise program coordinator, ran some numbers for us that indicate there are others like Jenum trying the same thing.
I just ran our statistics to get new numbers of unemployed that received a loan from us to date, since July 1st, 2009 (the beginning of our last fiscal year).
We have made 30 micro-loans since 7/1/09, and 9 of those loans were to people that had lost their jobs to the recession. (Two of those 9 were to one borrower).
Those loans were all made last fall and last winter. Right now the job market has probably picked up locally for the summer, so we are not seeing many unemployed coming to us to start a business.
Because of what happened with the recession and layoffs, most of our loans were made to male owned / managed businesses (23 of 30 loans, or 76%).
Over the 9 full years we have had the program, our portfolio had typically been made up of 60-65% loans to women, and 35-40% loans to men.
Because of the recession, more of the layoffs seemed to affect men, and more of the wives still had jobs (and are holding tight to them), thus the switch in our portfolio statistics.
There are some interesting cross-currents when we talk about entrepreneurs and recession.
The national outplacement firm Challenger, Gray & Christmas said recently its survey of job seekers showed only 3.4 percent opting to start a business in the first three months of 2010 and 3.9 percent in the second three months — the lowest two-quarter average since the firm began tracking in 1986.
Its headline: LOWEST START-UP RATE ON RECORD AS JOBS, FRAGILE ECONOMY DETER ENTREPRENEURISM
On the flipside, we have data from the Minneapolis Fed showing the rates of new business formation in Minnesota, at least, stayed consistent despite the economy.
Jenum acknowledges it’s been a slow start at Atomic Tarp, “as I have been trying to establish our own line of heavy duty sewn products, along with landing some consistent production contract sewing business. The summer has been better as this is the sailing season in the US and many purchase their replacement parts (catamaran trampolines) that we make here.
Jenum’s reluctant to pass on advice at this point to would-be entrepreneurs.
“There is a lot of stress and uncertainty with being self employed. There is also a great deal of satisfaction in having shaped the business out of a few ideas, experience and good old hard work.”
The long term plan, he says, is to “keep the company small (4-8 employees) and manufacture high quality, heavy duty products that are built to last.”
Maybe the most important ingredient: “My wife has been very supportive and trusting that I can pull this off.”
Got a story or some insights to share about entrepreneurs or start-ups in Minnesota during the recession? Drop us a line.