Finding ways to succeed

Young entrepreneurs get creative

by Christopher Key

Cynics would have you believe that old age and treachery will overcome youth and enthusiasm every time. Young entrepreneurs are proving that axiom wrong on a daily basis. Perhaps they view business challenges through the same eyes as Igor Sikorsky.

When the inventor of the helicopter was trying to peddle his brainchild, he kept running into aeronautical engineers who would tell him that, according to the laws of aerodynamics, the helicopter couldn’t fly.

“According to the laws of aerodynamics, the bumblebee can’t fly either,” Sikorsky retorted. “But the bumblebee doesn’t know anything about the laws of aerodynamics, so it goes ahead and flies anyway.”

When you hear the stories of young Whatcom County entrepreneurs, it becomes obvious that they are, to some extent, bumblebees.

Travis Holland founded the renowned Railroad Avenue tequila research institute known as Casa Que Pasa and more recently started the Fuego 542 restaurant in Maple Falls. Apparently, that wasn’t enough of a challenge. When he heard that former owner Jack Kahn was planning to shut down the legendary Horseshoe Café, he felt that keeping it open might be the challenge he was seeking. He completed purchase of the downtown landmark in 2001.

Holland is something of a renaissance man. He is a certified flight instructor and commercially rated pilot and served six years on the Bellingham Planning Commission. Raised in Bellingham and Nooksack, he has strong feelings about what constitutes our fabled quality of life. Nonetheless, he found the Horseshoe Café to be a daunting challenge.

“This is the second oldest business in Bellingham and the second oldest restaurant in the state,” Holland said. “I felt that it was important to the community to keep it going.”

There was a lot of work to do.

“I completely refurbished the kitchen, remodeled the rest rooms and expanded the bar,” Holland said. “I expanded our tobacco lines, since that’s a market where we can compete. The menu has undergone a complete change and we now make almost everything from scratch. Good food is important to a restaurant open 24 hours. We’re the only one downtown.”

Holland had to overcome some perceptions in the community about the Horseshoe.

“It was important to work on that and let them know that things have changed,” he said. “You have to figure out what the customer wants and give it to them.”

One of his strokes of marketing genius was the creation of Rowdy Buckaroo.

“For the first year, Rowdy was just our mascot,” Holland said. “Then the city turned down a mural I wanted to paint on the building. I really felt snubbed, so I took the angst and took action. I wanted to make a difference in the community and decided to investigate the customer service implications of the parking problem.”

As a result, Rowdy now cruises downtown feeding parking meters that have expired, thereby saving many customers a parking ticket. That, according to Holland, has made people think differently about the Horseshoe Café.

The business employs 35 people.

“It’s difficult to get good people and difficult to retain them in this business,” Holland said. “We offer a flexible pay package that rewards people for reliability. We avoid dilution of tips for those employees who depend on them. By improving our image, we increase business so tipped staffers, my business partners, can keep their income up.”

There are a few disadvantages to being a young entrepreneur.

“One local bottling company told me that all they could do was sell me a can of pop,” Holland said. “Another one went out of their way to help me. Developing reliable sources of supply is an important part of this business.”

When he couldn’t find restaurant software he liked at a reasonable price, Holland wrote his own and is hoping to develop a market for that.

“For young entrepreneurs, knowing when to say no to opportunities is one of the most important lessons,” Holland said. “Limiting your exposure to risk is vital. The other thing that’s tough is being willing to charge enough for your product.”

Heather Gist was a stay at home mom for ten years before she felt the urge to get out of the house for a while. A year and a half ago, she opened Little Pioneers, a children’s consignment shop in Ferndale.

“There aren’t any other stores like this in Ferndale and this type of business has a low start up cost,” Gist said. “I worked for a while at a similar store in Bellingham and learned a lot about what not to do.”

That was the extent of her business experience.

“It’s difficult to get permits for a used merchandise store because of pawn shops,” Gist said. “You have to run an ad in the paper, hold public hearings, it gets expensive.”

Rent is low at her Main Street location, but she had to close during July and August because of street construction.”

She found counters and racks at a store that was going out of business and her husband helped get everything set up.

“I thought about opening in Blaine, but that’s a tough sell,” Gist said. “In Bellingham, the rents are outrageous. Here, I’m the only game in town and I even get consignors from Bellingham.”

She will take on almost anything having to do with children up to size ten – clothes, furniture, strollers.

“We even carry a few new items, like the lemonade stands, which are very popular,” Gist said. “A local vendor makes the little tutus and bracelets.”

One lesson she learned very early.

“I had my Mom helping me for a while,” Gist said. “Never go into business with your family. I managed to get some time off, but juggling our schedules was crazy.”

Little Pioneers now has two employees, one of whom is a volunteer.

“It’s tough to find reliable people,” Gist said. “Especially when it comes to working moms because they need to be away at the same times I do. The hardest part of the business is pleasing everybody.”

She must be doing fairly well at it since people offer to help if it will keep the store open. There have also been offers to buy the business.

“I don’t do much advertising, since word of mouth is best in this business,” Gist said. “The challenges are mostly little things. Nobody told me how much work it would be or how many extra costs there are, like buying hangars.”

She believes that there is big money in consignments.

“With their first child, people usually buy new items,” Gist said. “After that, they look for used merchandise.”

The business does better in an economic downturn.

“Our prices are usually 50 percent or less than retail stores,” Gist said. “Kids tend to grow out of clothes before they wear them out. I love the extra income, but if I had to do it all over again, I would wait until all the kids are in school.”

Her location has some advantages, aside from the chaos on Main Street.

“Moms come in when the kids are at Tae Kwon Do across the street,” Gist said. “It really helps to have a restaurant right next door.”

Teresa Hertz was teaching, but wanted to spend more time with her kids. Her sister, Maureen Boncheff, moved here from California. Both were looking for a way to supplement their incomes. They explored the idea of a tutoring center, but nothing came of it. Maureen has a background in business, so they decided to explore opening a place for kids that would be very homelike. They envisioned a place where kids could get help with homework and that that would meet the needs of both children and their families. The eventual result was Blossom Childcare and Learning Center.

“We both know that there’s nothing scarier that leaving your kids with someone and going off to work,” Boncheff said. “You can’t do your job if you’re worried about your kids. Children away from home need to find a safe environment where they’re nurtured, cared for and educated. Groups need to be kept small. Kids can’t feel special in larger groups.”

They looked for a place to realize their vision and found it in a tract home next to Joe’s Garden in Happy Valley.

“We had approval for an SBA loan, but got nowhere with most bankers,” Boncheff said. “Then we ran into Carol Sanderson at Whatcom State Bank (now Banner Bank). She knew the need in the community, but also knew that we were broke. She was still able to package the loan in a way that worked.”

Boncheff and Hertz can’t say enough good things about Sanderson.

“We put this whole thing together really fast,” Boncheff said. “We were undercapitalized and facing $40,000 in construction cost overruns. We wouldn’t compromise our standards, but we were up against the wall many times. Carol supported us, lectured us when we needed it, and educated us in business management. You have to love a good banker that’s willing to hang with you.”

Sanderson also put the two in touch with the Small Business Development Center.

“Tom Dorr sat down with us at no cost and helped us get out of the mess we were in,” Hertz said. “That’s a wonderful service that holds hands with new businesses. He helped us set our rates and placed his own kids with us.”

Finally, they were able to open in June of 1998 and were instantly three fourths full.

“The numbers said we couldn’t open a second facility,” Boncheff said, “but we didn’t want to put pre-schoolers in with school age kids.”

Sunflower House opened last October.

“Without a committed, educated staff, we couldn’t do this,” Hertz said. “We have 22 people now, but it was very hard to find the right ones. The average pay in this industry is only $8.00 per hour. That’s one fourth of what some of them could make in the public schools. It requires a lot of talent and dedication.”

They describe early childhood education as the most underappreciated and selfless profession in the world.

“We had to find ways to compensate them other than higher pay,” Hertz said. “We build them up with incentives. They stay with us because we have imparted to them that they are professionals and they are appreciated, not just by us but by the clientele.”

They would like to see struggling families get more help from the government.

“We don’t want to say no to anyone,” Hertz said. “The government, however, pays for only a fraction of childcare expenses. We had to cap our DSHS enrollment. That’s bad for diversity. Who are the people who most need this center? Single parent families. The parents who have children here help each other out. Those who have more reach out to those who need help.”

They have a lot of empathy for working parents.

“We are working parents,” Hertz said. “We have to do everything we can to support families.”

Being young, in part, means making mistakes.

“We didn’t know much and learned through trial and error,” Boncheff said. “We had to learn to work within our means without compromising the program. We owe a lot to people from the Opportunity Council, Banner Bank, Western Washington University and the SBDC.”

One of their employees also helped them put the business on sound footing.

“Shawna Lovell, our assistant director, has been with us for four years now,” Hertz said. “She was instrumental in our success by taking over the day to day operations. That allowed us to look at the bigger picture. We never guessed it would be this hard. If this isn’t your life commitment, you can’t work in this business.”

These young entrepreneurs took advantage of their youth by holding on to their ideals in the face of overwhelming odds. Like the bumblebee, they are not only flying, but doing it pretty darn well.