Start A Business

Polly King, owner of the Coffee Shoppee in the Five Points West business district near Fair Park.

Take a risk/ Get a plan/ Hire some people/ Save the economy

We spoke with local entrepreneurs about the pitfalls and triumphs of becoming your own boss and how to make it happen.

By Jesse Chambers

An entrepreneur, according to the American Heritage Dictionary, is “a person who organizes, operates, and assumes the risk for a business venture.” Those who take that risk and create successful companies contribute much to society, especially in a bad economy. According to the U.S. Small Business Administration, small firms employ half of private-sector employees and generated 65 percent of net new jobs the past 17 years.

It seems that even the Great Recession hasn’t stopped many entrepreneurs from starting that bad-ass body shop, crisis PR firm or vegan taco stand. The recession may actually stimulate the creation of some small businesses. Economist Robert Fairlie told in 2009 that layoffs and other job reductions can push people to launch their own enterprises.

Ivan Holloway, Alabama managing director of Seedco Financial Services, a national community development lender, says many Alabamians are starting businesses in tough times. “For some of them, it’s a loss of a job,” he says. “For some, it’s rising food costs, or their hours have been decreased.”

And there are others, like some of the Birmingham entrepreneurs I’ve met, who simply have a business idea that won’t let them rest until they act upon it. These entrepreneurs shared their experiences and offered advice for others who feel compelled to pursue that primal American dream of becoming one’s own boss.

Brian Somershield and Geoff Lockert opened their now-popular Italian eatery, Trattoria Centrale, on 20th Street North downtown in 2009, in the depths of the recession.

Brian Somershield and Geoff Lockert opened their now-popular Italian eatery, Trattoria Centrale, on 20th Street North downtown in 2009, in the depths of the recession.

They’ve been friends since the sixth grade in Chagrin Falls, Ohio, near Cleveland, and planned for years to open a restaurant of some kind. Their chance came when Somershield, who was working as a cook for rock-star chef Frank Stitt at Chez Fon Fon, found the perfect location for a pizza shop.

Somershield and Lockert followed one of entrepreneurship’s classic tenets—find, and answer, an unmet need. “It’s very smart of find a niche and fill it,” Lockert says. “You couldn’t get a slice or a pasta downtown, and there was a built-in clientele. Thousands of people come here and work every day and need a fast lunch.”

The friends sought bank financing. However, in a terrible lending environment, their business plan didn’t help. “We got a loan because my dad put his house on the line, and without that, it wouldn’t have mattered at the bank if we had the greatest business plan,” Somershield says.

The men believed they could execute their concept. “We rested on our skills set, and his ability to cook, and my ability to take care of people,” Lockert says. “Then it just fell into place. We had an idea of what we had to do in revenue, and luckily we hit that from the start.”

They were confident they could succeed despite the recession. Lockert, while working as a server at Cleveland bistro Lola, met the editor of Restaurant Hospitality magazine, who encouraged him to open the restaurant. “Do it now,” he told Lockert. “The people who are successful are the people who open during recessions.” According to Lockert, the editor meant that if you can stay in the black in a down economy, you should do fine once things turn around.

They’ve been successful, with Somershield cooking and Lockert running the house. They serve pizza, pasta and salad, and have added Friday night dinners and Sunday brunch.

They also plan to open a Mexican restaurant called El Barrio, perhaps by this fall, on newly hip Second Avenue North in the Loft District. “I think this market desperately needs more stuff downtown,” Lockert says. He notes that he and Somershield have again found a niche. “You can’t get a taco downtown, so it all falls into place,” he says.

And it’s not just about money, according to Somershield. “We love downtown Birmingham,” he says. “We’re committed to doing whatever we can for downtown to become more attractive, more fun, more desirable, more visible.”

Another entrepreneur who opened her business in 2009 is Polly King, owner of the Coffee Shoppee, located in a strip mall in the once-thriving Five Points West business district near Fair Park. The Coffee Shoppee offers not just coffee but food, including King’s crab cakes and grits. King also presents art shows, book signings, coffee tastings and, on Thursday nights, poetry and live music.

Like Somershield and Lockert, King made a niche play, filling an unmet need in Five Points West for a pleasant gathering spot. “It was something that had been in my spirit for a while,” she says. “This area needed a place where people could enjoy and network.”

King proudly states she didn’t go into debt to open her shop. “Never, never, never, never borrow money to go into a new business,” she says. “I had my own capital that I had saved up. Everything you see is paid for.”

Entpreneurship comes naturally to King, who previously operated an assisted living facility and a day care and kept the books for her late husband’s contracting firm. “I’ve been in businesses since I was 22 years old,” she says. “I was always working for myself, so it was like second nature to me.” In addition to practical experience, she has read many books and taken business classes.

King is a nurse who has worked in hospitals but prefers being her own boss. “I have always wanted to live outside the box,” she says. “I’m not the kind of person to be on a job 30 years.”

ChipRewards, a small firm located in Lakeview’s hip Pepper Place complex, represents another niche play—a niche that didn’t exist before founder and CEO Bill Dexheimer had a visionary moment.

Dan Henderson of Summit Products

Dexheimer was a health-care executive for 25 years before starting a software firm, Valucentric Marketing Group, in 2001. Valucentric managed complex customer rewards programs for banks and retailers. “We used technology to change consumer behavior, or our clients did,” he says.

As the debate over fixes for the U.S. health-care system raged, Dexheimer saw an opportunity to apply methods from Valucentric. “I started watching as everybody was talking about the consumerization of health care, and I said, ‘Why can’t we do that in health care?’ It was the same human being. A change in behavior requires incentives.”

Dexheimer started ChipRewards in 2008. Bruce Akin, a long-time Southern Progress Corporation executive, later became company president. “We promote, incent and reward good behavior to reduce health care costs,” Akin says. The companies who pay ChipRewards to run the program for their employees benefit from these reduced costs.

The program is similar to conventional points-based customer-reward programs, with a key difference. “Instead of rewarding someone on a purchase transaction, we reward them for behavior,” according to Dexheimer. The behaviors employees are rewarded for might include exercising, having a physical or attending a health fair. “We built the infrastructure to collect the evidence that behaviors occur [and] we have a robust tracking system that issues points,” Dexheimer says.

According to Dexheimer, a veteran leadership team, like the one he and Akin provide, is important to an early-stage company. “One of the things that new entrepreneurs don’t realize is that whatever your business plan is, it’s not going to go exactly like you predict,” he says. “As you look back on successful ventures, I think that you’ve got to have a management team that can basically manage on the fly.”

Dan Henderson of Summit Products learned through experience that one’s plan may change. The Birmingham native founded Summit, which makes toys and learning products, in Denver in 1995. He attempted to sell his products direct to consumers but, he says, “The first five years, we couldn’t figure out how to make money.”

Summit tried 22 different media, including radio and direct mail, to reach customers, but nothing worked. Henderson finally decided to sell to retail stores, and the strategy succeeded. “Frankly, the stores taught us how to do business,” he says. “We grew and grew more profitable. I’ve learned that you have to have a plan and do the best you can, but don’t be surprised if your plan [changes],” he says. “Some things are successful and some are not.”

Henderson moved Summit to the Magic City in 2000. Summit has an office on Highland Avenue for sales, accounting and creative and an office in Hong Kong that works with the firm’s Chinese manufacturers to ensure product safety and quality.

Henderson is proud of his company and its products. “We have two primary brands, and they both do good things,” Henderson says. He cites Backyard Safari, designed to get kids off the sofa and away from video games, and Zillionz, which teaches kids to save money.

Matthew Myers, owner of Magic City Motor Scooters on Second Avenue North in the Entrepreneurial District, believes in his product—scooters that provide city dwellers with transportation while using far less petroleum than gas-sucking cars and trucks.

“I think people do need scooters,” he says. “You go anywhere else on the planet, and this”—he points at a lime-green scooter with a busted fender that he’s repairing in his shop—“is a family member, not an SUV.”

Of course, it isn’t always easy to convince consumers, and Myers is realistic about the challenges many retailers face. “You’re in that realm of things that people don’t really need,” he says. “It’s a gamble. So the product you’re selling better be pretty good.”

Myers’s scooter shop, along with some other small businesses, is housed in the Acme Building, which Myers and his dad Jay refurbished.

Myers urges anyone who opens a business to be serious. “You’ve got to love what you do,” he says. “Don’t start something that’s a passing fancy. If you have a rich dad and want something to do, OK. But if you put your life on the line, you better like what you do, or it won’t be a money-making venture.”

Devon Layne, chief operating officer of Innovation Depot, the business incubator on First Avenue North that anchors the Entrepreneurial District, has very often seen the kind of commitment that Myers represents. “Entrepreneurs are passionate about their business or their idea, and they’re really confident that what they’re doing will have an impact,” Layne says.

Layne identifies a common attribute of people who create new enterprises. “Entrepreneurs are always optimistic, so I think you have to be optimistic, because you are going to encounter so many challenges and brick walls, that if you’re easily deterred, you give up,” he says.

According to Layne, Birmingham is rapidly rebranding itself as an entrepreneurial community. “Birmingham has a strong eco-system in place for supporting, nurturing and growing early-stage companies,” he says, citing such organizations as Alabama Launchpad, Birmingham Venture Club and Tech Birmingham. He mentions that the Depot, which will soon have the capacity to host more companies—it now hosts 78, mostly tech firms—was recently named technology incubator of the year by the National Business Incubator Association.

Developer Cathy Crenshaw, president of Sloss Real Estate, agrees that Birmingham is a good place for small business. It’s probably one of the best places in the country,” she says. “We are tuned in to support local business. It’s part of the culture of the city.” ChipRewards is one of the many small companies that have found a home at Crenshaw’s Pepper Place complex. “We’ve seen a number of successful, creative start-ups at Pepper Place,” she says. “We nourish and encourage them.”

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