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Statistics reveal today's business start-ups are no lightweights.
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This story appears in the October 1996 issue of Business Start-Ups magazine. Subscribe »

When is bad news considered good news? When the number of business start-ups goes down but employment goes up, according to Joseph Duncan, vice president and chief economist for Dun & Bradstreet Corp.

A recent Dun & Bradstreet report shows that for the first six months of 1996, new business starts added to its database totaled 84,952-down 2 percent from the total tallied in the first half of 1995. "You would normally say if the number of entrepreneurs is down, it's a sign of a weakening economy," says Duncan. "And yet the current business cycle effect shows the economy is strong and not weakening."

Does this mean fresh batches of entrepreneurs are of less import to our economy? Quite the contrary. Says Duncan, "New businesses are playing a bigger role this year than last year."

Huh? The key, Duncan explains, is not the drop in actual start-ups, but the 8 percent increase in employment created by these companies. While a recent survey of existing companies revealed they had even lower expectations of adding workers than they did a year ago, Duncan notes, "this 8 percent increase [among business start-ups] helps explain why overall job growth is stronger than most people expect: New businesses are starting up with more economic force."

Meanwhile, Duncan believes the drop in the number of business start-ups is nothing to worry about, though it may indicate a tightening up of certain markets. "When the economy starts to improve, a lot of people go out with their ideas for starting a business," Duncan says. "And after a while, the field gets crowded. A lot of the [obvious] ideas have been taken. That may be the factor behind the 2 percent [drop]. As far as whether this is a long-term trend, we have to wait and see how it goes. It takes longer than just a few months to establish a strong trend."-Janean Chun

Comic Relief

Pizza Man Gives Publicity A New Twist.

Advertising, schmadvertising. That's what Vasilios W. Kapenekas thought. So instead of buying a humdrum black-and-white ad in the local paper, the co-owner of Vanelli's Restaurant in Tupelo, Mississippi, had an alter ego-Pizza Man-created for him by a local artist and made himself the star of his own comic strip. With the help of a cartoonist, The Adventures of Pizza Man has run on the front page of the local paper's Sunday funnies since the beginning of the year. Now that's creative marketing.

Kapenekas expanded the meaning of the pizza parlor's slogan-"Pizza Man Makes It Right"-by having his main character do more than hawk food. Pizza Man is a socially conscious do-gooder who teaches children about everything from not littering to the importance of honesty. His sidekick, Slice, assists him.

Although Kapenekas had no trouble attracting kids to his restaurant before, he says the comic strip promotion has helped boost pizza sales 35 percent from just one year ago. The comic strip is also fun for Kapenekas-but that's not why he does it. "The best thing about being in business is being able to do things you feel strongly about," he says. "And we enjoy helping children."-Lynn Beresford

Time In A Bottle

Commemorating 100 years of the automobile.

Prepare to steer your way into history. In honor of the 100th anniversary of our nation's introduction to automobiles, the Specialty Equipment Market Association (SEMA) is assembling auto-related artifacts for inclusion in a time capsule set to be buried in an undisclosed site. If yours is a company within the industry, you might consider donating a piece of auto paraphernalia for posterity.

Currently making the rounds of museums and automobile racing events throughout the country, the SEMA-sponsored time capsule is expected to add items up until the end of this month. At press time, the items selected for the 6-foot-long capsule included a message from President Clinton as well as a brick from the Indianapolis Motor Speedway, artist renderings of futuristic Fords, and assorted catalogs and automobile collectibles.

Intended to give future generations insight into the American automobile industry, the SEMA time capsule won't be unsealed for another 100 years. And you thought it took a long time to battle rush-hour traffic.-Debra Phillips

Silver Lining

Turning misfortune into opportunity.

When Susan Torrell lost her sales job at a small New York printing company in April 1995, she never thought she'd start her own business as a result of signing up to collect unemployment insurance. But that's precisely what happened.

New York is one of a few states nationwide that have instituted self-employment programs as part of their unemployment insurance systems. People who are likely to collect the maximum amount of unemployment insurance-and who are unlikely to find similar re-employment-are recruited into the program to determine whether they fit the entrepreneurial profile. If they do, they are encouraged to start their own businesses. However, they must meet strict requirements, including taking 20 hours of entrepreneurial training and attending counseling sessions.

"The Self-Employment Program is one of the most difficult ways to collect unemployment insurance," says Carolyn Peterson-Vaccaro, the program's director. "[We] made it difficult because my husband and I had a business that failed, and I don't want [our participants] to fall into the same pitfalls." Businesses now thriving as a result of the program range from a corrugated carton manufacturer to a mail order tackle business run by a nuclear physicist who also hosts fishing trips to Alaska and South America.

For Torrell's part, her Snyder, New York, decorative painting business, Tauriello Interiors & Painting, is now her sole source of income. Says Torrell, "I feel very confident about where I'm going with my business."-Lynn Beresford

What's Cooking

Want to improve your employees' productivity and build their team spirit? The answer could be taking them out of the office and putting them in the kitchen.

Carolyn Claycomb, coordinator of the Columbus State Culinary Academy in Columbus, Ohio, has been sponsoring private cooking classes aimed at workplace team-building since last October. "Learning to cook together is good practice for people to learn to work together," contends Claycomb.

Why cooking? Claycomb says the cooperative aspects of preparing a meal together teach co-workers the same skills they need to collaborate on a project or brainstorm for ideas. "When people cook in teams, they're dependent on each other, and that builds trust," she says. "It also gives them an opportunity to let them get to know each other as individuals, instead of being encumbered by formal work roles."

That applies to business owners, too, says Claycomb, noting that cooking classes put employees and employers on more equal footing: "Even the strictest boss appears more human when splattered with chocolate."-Lynn Beresford

Wash And Wear

Dry cleaning goes home.

Tired of spending an arm and a leg on dry cleaning? So were Betty Jagoda Murphy, 49, and James A. Smith, 60, founders of Creative Products Resource Inc. in North Caldwell, New Jersey, which is why they came up with their newest product.

"If you can cook a turkey in a bag in an oven," says Murphy, "we figured we could find a way to dry- clean clothes in the dryer."

The pair's Custom Cleaner kit comes with three Custom Cleaner sheets, similar to moist towelettes. The sheets are used to pre-treat stains, tossed in a dryer-safe bag with up to four garments, then placed in the dryer for 10 minutes.

So far some 60,000 people have purchased the Custom Cleaner kit through QVC, the product's primary outlet, since its introduction in 1994. The partners also plan to expand the product to retail stores throughout much of the East Coast.

Creative Products Resource, a product development company founded in 1979, has 43 patents but is putting most of its eggs in Custom Cleaner's laundry basket for now. "We are really focusing everything on this product," says Murphy.

Coming clean has paid off for the entrepreneurs, who estimate Custom Cleaner sales of $5 million for 1996.

Bound For Success

The plot thickens.

Once upon a time, Mark Targe worked at The Chicago Tribune and the Chicago Sun-Times. Last October, Targe's life began a new chapter when he founded Biographies, a company that writes and publishes clients' real-life stories.

Biographies are based on four 60- to 90-minute taped interview sessions, conducted either by telephone or in the subject's home. Clients pay $1,100 for five copies of the 75- to 100-page book, bound in simulated leather. For a little extra, Targe will add photographs or more pages.

Targe knew his novel idea would be a hard sell at first, so he used his mother's life story to create a prototype book. And so far, most of Targe's clients have asked to have their parents' biographies done. Although he believes there's a large untapped market for the books, he hasn't yet begun drafting expansion plans.

"I do the writing, editing, proofreading, marketing and advertising," Targe says. "I'm a one-man show."-Holly Celeste Fisk

Raise Your Voice

It's time to cast away doubt, apathy and disillusionment-and cast your vote.

We know it's been said many times, many ways, but it seems small-business owners still aren't getting the message. The privilege of voting has been downgraded to the right to vote, which has in recent years apparently been interpreted by many as the burden of voting.

Nearly 40 percent of small- and midsized-business owners believe it doesn't really matter who gets elected in November, according to a recent survey of some 1,200 business owners conducted by George S. May International Co., a management consulting firm in Park Ridge, Illinois. Meanwhile, 19.3 percent expected the election to negatively affect their businesses, while 17 percent hoped for positive changes. Almost 38 percent expected no change at all.

"Small-business owners believe their business knowledge and marketing skills, rather than external factors, are what really make the difference [in their businesses]," says Roz Angell, director of corporate communications for George S. May International. "Very few take the time to get involved in the political process, which is unfortunate."

Yet other entrepreneurs, says Angell, are "fed up with campaign promises. With the [presidential] candidates flip-flopping on a daily basis, trying to attract a large number of voters and campaign contributions, they don't think either of the candidates has an ounce of credibility."

Despite these educated guesses, Angell admits the results of the survey are surprising and, in fact, largely inexplicable. "If [those entrepreneurs] stopped and thought for a couple of minutes about four issues-taxes, trade policy, government regulations and health care-and what these issues have cost them personally in terms of dollars and time," says Angell, "they'd realize these are 'make it or break it' issues."

"Small business is the fastest-growing segment of American business today," says Ginny Beauchamp, vice president of the National Association for the Self Employed. "And it's critical that small-business owners be a part of the political process, as many economic issues affecting their daily lives will be undertaken by the [newly elected] president as well as the 105th Congress."

Fortunately, as apathetic or disillusioned as they may be, most entrepreneurs still muster up the energy to make it to the polls. According to the survey, only 14.5 percent of those surveyed said they did not plan to vote.

For those holdouts who doubt whether they can truly make a difference in the outcome of the 1996 election, consider that some sources indicate more than half the people who voted in the 1994 election were either owners of small businesses, employees of small businesses, or members of small-business households. The power that implies is astounding.

To vote or not to vote? This November, that should definitely not be in question.-Janean Chun


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