FEBRUARY 2008: SMALL BUSINESS
homework
After 20 years in mental health, Cornelius resident
Christine Campbell joined a growing small-business trend by
launching her own tile-setting company last year.
Photo by Michael G. Halle
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Home-based businesses are on the rise as more and more workers
flee the corporate world.
By Jon Bell
Cornelius resident Christine Campbell followed 20 years of work
in the mental health field with a stint in construction,
working for a small building supply company, a construction
firm and also one of the corporate behemoths of the
industry.
But it didn’t take long before Campbell realized that
the corporate gig didn’t exactly suit her fancy.
“It became almost like soldiers marching in a
line,” she says. “It just wasn’t for
me.”
So last year, armed with a natural knack for construction,
some tools of the trade and her business partner, William
Melgar, Campbell joined the growing ranks of Oregon’s
small office/home office (SOHO) business owners by launching
her own tile setting business, Tuscan Sun Tile & Stone.
“My business partner and I had a lot of experience with
this kind of work in the past,” she says, “and we
just decided it was time to combine our forces and see what we
could do for the future.”
Campbell and Melgar are not alone. The SOHO business scene
nationally and in Oregon, a state fueled by small business, is
growing thanks to the Internet, globalization and shifts in the
traditional workplace — and in spite of challenges such
as shaky health care and retirement benefits.
Christine Campbell tends to the books from her home office
in Cornelius.
Photo by Michael G. Halle
|
According to the latest U.S. Census Bureau report on
nonemployers — essentially self-employed individuals
operating small, unincorporated businesses such as corner
stores, home-based businesses or even weekend photography
gigs — there were more than 20 million businesses
without paid employees in 2005, an increase of more than 4%
over the prior year. In Oregon, the Census counted some 218,000
nonemployer establishments with receipts of $9.1 billion in
2002; by 2005, those numbers had increased to more than 246,000
and $11.2 billion, respectively.
“I think over the years since I have been tracking this,
there have been several moments when the SOHO opportunities
have been on the rise,” says Terri Lonier, a New
York-based small-business expert and founder of
consulting firm Working Solo. “I think we’re
currently in another one.”
In business for herself for more than 20 years, Lonier says
the first big wave of SOHO opportunity came with the rise of
the personal computer in the 1980s. After that, the Internet
stoked the scene around 1995 and now, 12 years later, she says
SOHOs are again raging thanks to “broadband ubiquity and
the reality of actually having a global marketplace.”
Self-employment in Oregon has floated upward since taking a
plunge during the recession in 2001. According to the Oregon
Employment Department, some 167,000 Oregonians were
self-employed in 2000, but by the next year, that number had
fallen to 139,000. As the economy slowly climbed out of the
slump, so, too, did self-employment numbers rise; by 2004, they
were back up to 160,000.
“I can go to any community in Oregon and I can find
people that, given the right resources, would be more than
interested in starting a small business,” says Shawn
Winkler-Rios, executive director of Lane MicroBusiness, a
nonprofit micro-enterprise development organization in Eugene.
Micro-enterprises are small businesses, often home-based,
with fewer than five employees and capital needs of under
$35,000.
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The rise of Oregon’s SOHO businesses
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2002
ESTABLISHMENTS
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2005
ESTABLISHMENTS
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Professional, scientific and technical services
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32,879
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37,376
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Real estate and rental and leasing
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23,817
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29,921
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Construction
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23,155
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24,994
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Arts, entertainment and recreation
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11,960
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14,184
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Mining
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145
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148
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TOTAL
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218, 326
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246,129
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SOURCE: U.S. Census Bureau
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The rising numbers of SOHO businesses can indeed be linked in
part to the proliferation of high-speed Internet connections.
In addition, unlike earlier generations, younger workers
aren’t working for the same employer for their entire
careers. Instead, they’re assembling what Lonier deems a
“delightful mélange” of different work
opportunities and skills, which often includes stints of
self-employment.
But the SOHO has also become more appealing to the graying
masses as well.
“We have an increasingly large number of baby boomers
who are saying, ‘I may be leaving my job, but I’m
not retiring,’” Lonier says.
And then there are economic factors that sometimes force
people into self-employment. A prime example: last fall’s
closure of Louisiana Pacific’s mill near Burns.
Winkler-Rios says a few former employees have decided to have a
go at their own business, and one even plans to use his
severance pay for startup money.
Since he came on board in 2000, Winkler-Rios also has seen
increasing support for the SOHO as an economic development
tool, especially in rural areas. In 2000, there were just nine
members of the Oregon Microenterprise Network, a statewide web
of programs like Lane MicroBusiness; today there are more than
45. And where once Lane served businesses in just its own
county, it now has projects in 11 counties.
“Oregon has a pretty vibrant microenterprise industry,
and it’s growing,” Winkler-Rios says. “I
think there’s been a shift in the smaller communities too
and we’re starting to see more interest in home-grown
businesses as an economic development strategy.”
But if the bigger picture may be rosy for Oregon SOHOs, often
the day-to-day is full of the trials and tribulations of
small-business owners. Among them: health care, cash flow,
finding steady business and planning for the future.
“It’s very exciting and it’s full of
possibilities,” says Paul Bingman, owner of a web
programming company called Edgewood.net. “It’s also
very scary at the same time.”
Natalie Brecher, a management consultant in Beaverton, has
been in business for herself since 1998 and says that being the
only one who performs her work — primarily speaking and
consulting — she is limited in how much she can
accomplish in a normal day. She also says sole practitioners
often don’t have people around them to talk about
ideas.
And, like any business, larger market forces also can have
their ways with the self-employed. Bingman says the
“dot-bomb” market crash was tough for him to
weather, and Kathleen Cremonesi, who works for her
husband’s Veneta-based espresso repair business,
Steffano’s Espresso Care, says the strong euro has forced
the company to up prices on parts imported from Italy.
But by far the most discomforting ache to small-business
owners is health care. Without the resources of a large
company, many SOHO businesses struggle with providing insurance
not only for employees, but even for their owners.
A 2005 survey by the National Association for the
Self-Employed found 14% of micro-business owners had no health
insurance and 27% relied on their spouse’s coverage, a
setup commonly referred to as the corporate/SOHO hybrid.
“It’s something we’re still working
on,” says Cremonesi, who has yet to find good
insurance for herself and her husband. “Health insurance
is a challenge, and I don’t know that there are a lot of
great options.”
Brecher says she has catastrophic insurance with a $5,000
deductible. Although fine for now, she says she is concerned
with the continued increase in premiums and what will happen
over the next 14 years until she’s eligible for
Medicare.
Though he’s no longer married, Bingman had a
corporate/SOHO hybrid setup when he originally set out on his
own with his tech company. And Campbell, whose partner of 18
years works for an executive travel company that provides
benefits to domestic partners, says she’d be at a loss
without the coverage. “Without that we’d pretty
much be up a creek,” she says.
Lane MicroBusiness is looking to model a partnership
established in Colorado between Kaiser Permanente and 120
microenterprise programs that allows small business owners to
acquire affordable coverage. Winkler-Rios says that the program
still is a ways off, but he has hope, not only for a
health-care solution for small businesses, but for a continued
upward swing in the SOHO space as well.
“I don’t see myself running out of work anytime
soon,” he says.
Have an opinion? E-mail feedback@oregonbusiness.com
