Most people do not associate Las Vegas, the nation's capital
of excess, with anything small. Vegas is a metropolis where the
massive Mirage casino has to make $1 million per day just to break
even, the Strip houses nine of the largest hotels in the world, and
casino owners spend millions of dollars to manufacture fake
volcanoes and other gargantuan amusements.
Yet even as Las Vegas has boomed-Vegas' population grew by
66 percent between 1990 and 2000, the largest growth of any major
U.S. city-and the casino business has expanded, the city has become
an entrepreneurial town. In fact, Las Vegas ranked second in the
West in D&B and Entrepreneur's 2002 "Best
Cities for Entrepreneurship."
Now, after more than a decade of breakneck growth, as well as
several months of economic slowdown, the entrepreneurs of "Sin
City" face three concurrent challenges. How entrepreneurs
handle these challenges will determine whether they succeed or,
like many migrants to Las Vegas, fail and then leave town, just
more dreamers who gambled and lost.
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A Land of
Promise
In many ways, Las Vegas seems a natural destination for
entrepreneurs, for dreamers and schemers planning to strike it rich
in the desert. "Vegas draws people who are adventuresome,
since it is a city focused on taking chances," says Sharolyn
Craft, counseling director at the Nevada Small Business Development
Center. "In most cities, people moving there already have a
job when they arrive. But many people move to Vegas without a job,
hoping to set up a business here."
Paula Yakubik, 30, co-founder of Mass Media/Vanguard, a
marketing firm with 11 employees in Las Vegas, understands what
Craft means. "Vegas loves entrepreneurs, and it's a young
city compared to New York or Los Angeles, so it embraces its
young," she says. "I can go to a meeting with a client
who's 55 and be treated like an equal."
The city's most famous figure, Brooklyn-born mobster Bugsy
Siegel, was a self-starting dreamer. In the 1940s, Siegel moved to
Vegas, which had already legalized gambling but had only a few
dingy betting parlors, with the idea of turning the city into a
tourist destination by building gleaming casinos, taking craps,
roulette and other games upscale. In December 1946, he opened the
swank Flamingo Hotel, a luxurious and profitable gambling joint
that triggered the fast growth of the Vegas Strip. By 2001, the
city was drawing more than 36 million visitors a year.
As the city has grown, its leaders have adopted some of the most
pro-small-business policies in the nation. Nevada has no income tax
and relatively low corporate taxes, and the lack of excessive
regulations on housing has helped developers keep new-home prices
among the lowest in the country, allowing entrepreneurs to stretch
their dollars. "I have a huge house here that I never could
have afforded when I lived in the Bay area," says Mark Olson,
45, president of Olson/Ballard Communications, an eight-person
Vegas consulting and public relations firm. Indeed, the cost of
living in San Francisco is 171 percent higher than in Las
Vegas.
These low-tax, anti-red-tape policies attract thousands of
retirees to the state, providing consumers for small businesses and
making it relatively easy to start a company in Nevada. What's
more, because Vegas boasts few large corporations other than
casinos, small businesses enjoy significant influence over the
chamber of commerce and other local instruments of power, a rarity
in most American cities.
The fact that the casinos depend on small-scale contractors also
promotes growth. Add a work force accustomed to handling shifts at
any time because the casinos stay open all night, a favorable
climate and incessant evangelizing from mayor Oscar Goodman (a
former mob lawyer), and Vegas' charms become even more
alluring. Goodman, who drinks and gambles frequently yet is seen as
a highly skilled politician, has started a range of incentive
programs to lure even more businesses to Sin City.
Hardly surprising, then, that entrepreneurs have been coming to
Vegas with a gold-rush mentality, creating a huge and diverse
community of small businesses. Boutique developers have built
upscale condominiums for seniors who want to retire in style; one
condo complex contains anti-aging spas and elegant cigar bars. The
Greater Las Vegas Yellow Pages lists 98 pages of advertisements for
adult entertainment proprietors and escort services, most of which
are small businesses. Vegas supports hundreds of florists, many of
which handle the conventions, weddings and other massive events
held at casino hotels. Joe Valdes, 34, co-founder of Flowers2U, a
24-hour florist with 12 employees, says his shop frequently
prepares massive bouquets for shotgun weddings or sends hundreds of
dead, black roses to recent divorcees-fitting for the quickie
marriage and divorce capital of the country. Meanwhile, Systems
Research & Development, a tiny Vegas company backed by the
CIA's venture-capital fund, creates software that helps casinos
detect card cheats and other thieves.
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