Sassy Startups

Posted on Apr 1, 2009 :: Cover Story
Posted by , Insight on Business Staff Writer

Chris Verbeten (left) and Mary Pulak launched Hooked on Hooping

Just about a year ago, Chris Verbeten never would have believed that her drug peddling days would be cut short.

But when the Merck pharmaceutical rep was downsized in spring 2008, the former preschool teacher from De Pere was too young for retirement and too vibrant to sit still.

Enter her close friend Mary Pulak – another victim of troubled economic times – who had, quite serendipitously, found the answer to their career conundrums.

They combined their friendship, zest for life, personal funds and entrepreneurial spirits and launched Hooked on Hooping—a fitness based business that has them shaking their hips at their collective misfortune.

Lemonade from lemons, indeed.

Verbeten and Pulak are far from alone in having to pick themselves up, dust themselves off and forge a new direction – no small task in this seriously challenged economy. They join the millions laid off nationwide who have been seeking jobs that just aren’t there.

The solution? Many are choosing to create their own destinies by starting their own businesses.

Such proactivity in the face of despair is something business development centers in Northeast Wisconsin have witnessed over the past year.

“We just continue to gain momentum in terms of people interested in starting a business,” says Amy Pietsch, director of the Venture Center at Fox Valley Technical College in Appleton.

And while not all of those who come through the entrepreneurs program have been downsized, Pietsch notes that increasing numbers of clients want to be more proactive and in control of their own destiny.

“Even though the economy is so uncertain, people are deciding they can have a level of certainty if they take things into their own hands,” she says.

Tough times … tenacious spirits
Over the past 12 months, the number of unemployed persons nationwide has increased by 5 million to 12.5 million and the unemployment rate in February was 8.1 percent, according to the U.S. Bureau of Labor Statistics. So with such an uncertain climate, is now really a good time to pursue starting a new business?

“No time is necessarily bad if you do your homework,” says Joseph R. Cardamone, president of the U.S. Federation of Small Businesses. “You have to think it through. You should have a game plan.”

Mark Burwell, executive director of the Entrepreneur Center of Urban Hope in Green Bay, agrees. During his tenure, he has seen many economic downturns, and he says, “The peak times [to start a business] have always been during recessionary periods.”

Pietsch agrees, in theory, that now is a great time to start a business. “What’s bad for Wall Street [can be] good for Main Street.”

That said, experts caution that people need to realize that jumping into entrepreneurship should not be taken lightly – and it likely will not be a quick fix to short-term financial needs.

“The idea of losing your job one day and starting a business the next is not going to work,” says Cardamone.

Pietsch concurs: “We let them know that self-employment or entrepreneurship is not a remedy to their current situation.

“It’s a long haul. We help them understand the reality of what they’re getting into.”

The path to hoop happiness
For Verbeten and Pulak, their reality was that, combined, they had taught for almost 50 years in public schools. When both started to feel a little burnt out, they ventured into other careers. Verbeten joined Merck Pharmaceuticals in 2000, selling drugs and vaccines. But last May, her division was cut by two-thirds nationwide – leaving her out of a job at age 49.

Pulak, 58, could have retired after 33 years in the Green Bay Public Schools; instead, she took a job as a consultant and health care educator for the Wisconsin Education Association Council (WEAC) Trust. “Why not try something [new]?” Pulak says. “Who would have thought that two years later I’d be downsized?”

The two spirited women and longtime friends used their combined “eternal optimism” to propel them to their next career venture … and decided to hoop it up. “I’m a firm believer that everything happens for a reason,” says Pulak.

She discovered hoop dancing a few years ago at a national wellness conference and was mesmerized.

“It was huge on the West Coast and East Coast,” Pulak says. After being laid off, she began to consider “hooping” as a career opportunity.

Pulak and Verbeten put their heads – and finances – together, made 30 to 40 custom hoops (in Pulak’s garage) and, in true grass-roots fashion, headed to the Green Bay farmers’ market, hoping for a warm reception. That’s just what they got – they sold out of half their hoops at their first outing.

“We were getting excited thinking this could work,” Verbeten recalls. “This thing was all snowballing very quickly,” Pulak adds.

The duo decided to take their hip-shaking passion to the next level, enrolling in a class at the Entrepreneur Center of Urban Hope. “It was phenomenal,” Pulak says. “They literally walk you through the process. We evolved as we went through it.”

Another ray from Urban Hope
Another entrepreneur who found similar success through the center was Paul Baye. His company, Contract Assembly Services (CAS) in Green Bay, also grew out of the spoils of a troubled economy and tough times in Northeast Wisconsin’s paper industry.

Baye was employed for 13 years as a service technician/manager at Paper Converting Machine Co. in Green Bay. A few years ago, however, the company was bought by a larger corporation with, according to Baye, a “different philosophy.”

“I was forced out because I was forced to sign a non-compete agreement,” he says. He chose not to do that. “If you don’t sign, you lose incentives. I had nowhere to go but down.”

With six children to support, Baye turned this potential misfortune into a career opportunity. “It seemed like a good time to start a new thing,” he says. Baye was one of 13 engineers who left the company about the same time.

Interestingly, Baye remained working at Paper Converting while researching and starting up CAS, which builds, installs, programs and troubleshoots control panels for industrial machinery.

“At that time, we were not direct competitors,” he says.

He turned to his friend Randy Diederich, also involved in the same industry, and the two pooled their skills and 401 (k) money from their previous jobs to start CAS. They drew up their award-winning business plan through the Entrepreneur Center of Urban Hope program and were especially proud since neither had owned his own business before.

Now after being in business just over two years, CAS made $250,000 in its fi rst year and is aiming for $1 million in 2009, Baye says – which would exceed their business plan’s projection by a few years.

“That’s a good growth pattern,” says Baye, who now has seven employees and just scored the company’s first international client.

And while a depressed economy tends to hurt most businesses, Baye admits it actually helps his. He has hired two skilled engineers who were recently downsized.

“We’ve succeeded due to the fact that people have been laid off,” Baye says. “Otherwise, we’d have to go out there and get people and train them.”

In addition, industrial firms often contract with CAS on a temporary basis to fix machinery. “When they’re not doing well, they don’t have a ton of money for new machinery,” Baye says.

Baye and Diederich take pride in remaining in the field they love and fostering strong relationships with their staff . “We wanted to provide a business to create jobs for people,” says Baye. “We wanted to treat the employees the way we would have liked to have been treated.”

Diederich echoes, “It’s tough, but it’s still better than where we were. At least we’re in control of our own destiny.”

Curbing his corporate woes
Like Baye and Diederich, Gary Hartwig of Appleton was well attuned to the demands, and challenges, of the industrial sector. In fact, he faced several bouts with downsizing. The fi rst came in 1999 when, after 22 years, he left K-C Aviation when new owner Gulfstream Aerospace brought in new management.

Then, after various managerial roles in the corporate aviation industry, in 2007, Hartwig began as corporate operations manager at AMERHART in Green Bay, a distributor of construction products. After only six months, however, the housing decline led to uncertainty about his role there.

“I was able to help a lot, but it wasn’t enough for me long-term to feel challenged. I had to prove I could take my skills and abilities and apply them to a different industry.”

As the sole breadwinner for his family, Hartwig wondered what, at 53, his next move would be. “There was plenty of anxiety,” he recalls.

Hoping to stay in the Fox Valley, Hartwig began actively networking. “I established a lot of good contacts,” he says. “I just really engaged everybody that I could.” That included family members.

Hartwig’s career plan began to take shape after talking with his nephew, Troy Christancht, who owned CurbScape in Neenah. Hartwig ended up buying into and then assuming the landscape concrete curbing business. “He really needed somebody with engineering expertise and more business experience,” Hartwig says.

“I feel really fortunate,” he says. “I’ve always wanted to own my own business. I’ve always kind of reached a level where I couldn’t go any further. I really wanted to do this, but I didn’t have a plan.”

He sought the guidance of the Venture Center at FVTC, where he graduated from the business plan program in December. “It was just an outstanding program,” Hartwig says. “It’s a lot of work, but when you’re done, you’ve got a plan that a lot of the banks in the area have a lot of regard for.”

As banks have tightened credit, the criteria for obtaining a loan has meant that startups are scrutinized more carefully than before.

“Banks are being more careful, but it’s a case-by-case basis,” says Mickey Noone, regional president of First Business Bank in Appleton. “Times are tough, but some of the best businesses out there were started in tough times.”

Having a business plan in place before going to a bank is critical, he says.

“Having nothing is a non-start these days,” Noone says. “You have to have a plan.” In addition, having letters of reference and letters of intent from potential clients can speak volumes.

Hartwig has just exhibited at his first home and garden show and, despite the rather sluggish housing market, he says, “It went really well even though the number of attendees was way down. The people that were there were serious buyers.”

Hartwig’s new lease on life is paved with concrete curbs and confidence, despite the many challenges he’s seen.

“It’s really a struggle to go through,” he says. “You can really lose your identity, but you just have to understand that you’ll look back at this, and it was the best thing to happen to me.”

Moving forward
As many of these entrepreneurs can attest, their paths to new ventures were not always smooth. In most cases, they were prompted by the need to fi nd a fresh new way to survive the challenges of the 21st century.

That clearly takes not only fresh thinking, but tenacity and solid skill sets as well – which each of these business owners exemplify.

“People definitely have to have the right components to be an entrepreneur,” stresses Burwell, adding that the key skills include innovation, passion, engagement and empowerment.

And Burwell has seen more than 500 businesses launched in the past 10 years in the New North region.

“We have a business and a half that opens each week … last year, 68 businesses were opened,” says Burwell. “We have a new group of people who have not only lost their jobs, but they have money on the sidelines. They’re coming into the program to learn about entreprenuerism as an investment.”

Of course, not all small business startups survive the long haul. According to Brian Headd, economist with the U.S. Small Business Administration Office of Advocacy, two-thirds of new employer establishments survive at least two years, 44 percent survive at least four years and 31 percent survive at least seven years. Their research also found that businesses that survive four years have a better chance of surviving long-term.

Cardamone says many startups, especially restaurants, frequently fail within the first year.

“It’s a very rare business that shoots off out of the gate and makes money,” he adds. “The people who survive are the ones who did their homework and know how to work the marketplace.”

Despite sobering statistics, both experts and the entrepreneurs themselves agree that the hard work may be worth it.

Just ask Verbeten and Pulak – if you can catch them between making their hoops and shaking their moneymakers. Only about a year removed from those painful layoff s that prompted their transition, they’re now as positive as ever … and having lots of fun.

“Twelve months ago, I never thought I’d be unemployed and doing this,” says Verbeten. “But we’ve got a vision.”

Their optimism is also realistic, understanding that their venture could turn out to just be a passing fad.

“If it does, it does,” says Verbeten. “Then you veer; you don’t give up.”

“I don’t think we have any regrets,” adds Pulak. “We’ve had some learning experiences, and we’re letting it go where it takes us …

“and this is the most fun I’ve had in my entire life.”