Southwest Las Vegas a melting pot of entrepreneurial endeavors

He opened Vegas Homebrew, 5140 W. Charleston Blvd., a beer- and wine-making supply store.

He had been brewing his own concoctions at his home in Portland, Ore., for nearly 20 years and decided to make his passion his work.

He created a business plan and researched potential locations, all while working as a pharmaceutical sales representative. He chose Las Vegas because his store would be the first of its kind, whereas Portland already had six stores, Berg said.

He did not make any money for the first eight months and lived on a friend’s couch during that time. But since those first shaky months, it has been increasingly profitable each year, he said.

“The toughest part was making the decision to do it,” Berg said. “I’ve got very old-school parents who think that getting a job and working for the same company for 35 years is the way to go. My parents were having a tough time with that.

“Every day coming to work is a treat for me. Here I’ve got a business. In the past, I’ve worked for large companies, and you take directions, whether you agree with the decisions or not. As an independent business owner, it’s entirely your decision. Granted, it’s a little bit risky; I appreciate the independence.”

Politicians are betting on the same entrepreneurial spirit that brought Berg to Las Vegas to help the local economy out of the recession.

City Councilman Steve Ross said he and others have worked to make it easier for entrepreneurs and small businesses to get started.

“You know as well as everyone in the world that we are in the bottom end of a recession,” Ross said at the White House Urban Economic Forum on March 29 at the Las Vegas Convention Center. “This is probably the golden time for young people and even old people like me to think about starting a new business.

“They used to say home ownership is the American dream, which it still is, but you know what? Business ownership is the American dream, too. When people know they can work for themselves, provide for themselves and do something that makes them happy, it’s not a job, it’s fun, and I think now is the right time, now is the right economy to start up. … (W)e’re going to climb out of this thing. Those who get in the saddle (now) are going to make money.”

The forum focused on boosting small- business startups because of their importance in the United States economy.

According to the U.S. Small Business Administration, small businesses represent 99.7 percent of all employers. They employ more than half of all private- sector workers and have generated two-thirds of the country’s new jobs in the past 15 years.

About seven out of 10 new businesses survive at least two years, half at least five years, one-third at least 10 years and one-quarter stay in business 15 years or more.

A study by the Brookings Institute outlined the strengths and weaknesses of Nevada regarding economic expansion.

The good: Nevada has a business-friendly environment and tax structure, light regulation and low costs for business startups. Industries with the highest potential to drive the economy include tourism, gaming, health and medical services, information technology and clean energy.

The bad: the lack of economic planning, need for better cooperation and a weak technology sector. Also noted was the lack of education in the workforce.

The University of Nevada, Las Vegas offers entrepreneurship classes that walk students through the process, beginning to end. The Howard R. Hughes College of Engineering teamed with the Lee Business School to create collaborative entrepreneur projects. Engineering students design products, then business students develop business plans for them.

It all begins with an idea. Rotten bananas, for example.

Southwest-area resident and UNLV engineering student Alan Carreno created the Banana Box this spring with two classmates. It remedies the problem of a bushel of bananas becoming ripe, then rotten, at the same time. It controls the temperature inside seven separate chambers, each holding a banana. The bananas ripen sequentially, so one ripe banana is available each day.

Business students may develop a business plan for the Banana Box beginning in the fall that will be presented at the Southern Nevada Business Plan and Donald W. Reynolds Governor’s Cup Collegiate Business Plan competitions next spring.

Angela Douglas, who lives near Southern Highlands, was on the team that won first place at this year’s Governor’s Cup competition, held April 18 in Reno. Her team created a business plan for MASH Tool USA, a gardening tool designed to help dig and plow.

Douglas’ team is scheduled to compete Wednesday in the Tri-State Reynolds Cup competition against student teams from Oklahoma and Arkansas, with more than $100,000 in prize money available.

“We’re pursuing full patent protection, looking at suppliers and evaluating our financial situation,” Douglas said. “We’re doing all the things it takes to get a business up and off the ground. … We really want to put this in peoples’ hands. Hopefully down the line we’re able to develop a consumer model.”

Douglas said she and other students have invested about $25,000 in the project, and they are seeking another $275,000 in investments.

Douglas credited her team’s success to the people involved more than the product itself.

“I would say the most important part of any venture like this is your team,” she said. “You can have a really great idea, but if you don’t have a great team, it’s a great idea that really can’t grow anywhere. If you have a great team, you can have a less-than-stellar product that can make it to the market.

“Team, first. Product, second. Then business plan.”

Earl McDowell, deputy administrator of the Employment Security Division of the Nevada Department of Employment, said the Nevada Governor’s Workforce Investment Board would make an effort to increase startups through incentive programs and changes in legislation.

“That’s where you’re going to see the growth, in the entrepreneurs,” McDowell said. “As a state, we make sure we provide the necessary training so they have a good, qualified workforce in those areas. … That’s the quickest way to get the growth that you want in Nevada.”

There is one part missing, though. The most important thing entrepreneurs need is money, McDowell said. And that is not easy to come by in this economy.

Andrew Hardin, director of the UNLV Center for Entrepreneurship, said investors are slow to invest because “only one out of 10 of their investments will pay them back their return.”

“Most of the businesses will fail,” Hardin said. “It’s kind of a science. (Investors) have to depend on one to return their investments. That’s why they’re looking for a large rate of return. They’re not just looking to recoup from one investment.”

Hardin said that “lifestyle” businesses, such as dry cleaners or salons (or home brewery suppliers), are relatively simple to start because one person runs the business alone.

“Startups are notoriously difficult to get up and running,” Hardin said. “If you’re only paying yourself, you’ve got a good chance of success, especially if you don’t mind working 80 hours a week.”

Hardin used his background as an example. He started a commercial maintenance business and already owned all the tools he needed. He said he was able to file for a business license, get insurance and start working relatively quickly.

When serious cash is required to start a business, an angel can help.

Angels, or angel investors, are successful entrepreneurs who invest in startup businesses. Hardin said they usually fund business up to about $2 million.

Venture capital firms also invest in businesses but usually not until $7 million or more is needed, Hardin said.

For any aspiring entrepreneur, a business plan is a must, Hardin said. A plan should include a detailed industry analysis, market analysis, business model analysis, marketing plans and financial projections.

“I think it’s a pretty easy process in Nevada,” Hardin said. “We’re a very business-friendly state. I think now is one of the most exciting times there is. There’s a big, huge push for small businesses. Everybody I talk to is really excited about all these things going on.

“Are we Silicon Valley? No. We’re Las Vegas. And I think that’s a great place to start a business.”

Contact View education reporter Jeff Mosier at jmosier@viewnews.com or 224-5524.