Norman Childs of Eyetique: Making an impact by starting off small

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Norman Childs doesn't have to look far to realize how far his business has come.

All he has to do is look downstairs.

Mr. Childs, owner and founder of Eyetique, started his business in 1979 as a one-man operation in a tiny store on Murray Avenue in Squirrel Hill. Today, his eyewear boutique business has grown to include 13 stores in Western Pennsylvania, dozens of employees, a manufacturing center in California and a Squirrel Hill headquarters in the same location as the original store -- just four times larger.

"We're still a very small business in the grand scheme of things," said Mr. Childs, 56. "And small business is the nucleus. That's what keeps our country going. No matter how big we get, we can't lose sight of that."

While local and state governments try to entice big businesses to the area with tax incentives, job training and infrastructure development, entrepreneurs are just as integral to economic development.

Small businesses -- firms with less than 500 employees -- account for 49.2 percent of all private-sector employment, according to the Small Business Administration, and that number has grown since the recession.

"The vast majority of new job creation is done by small business, whether it's existing operations or new ventures," said Dennis Patrick Slevin, a professor of entrepreneurship at the University of Pittsburgh.

Since the start of the recovery, small businesses generated 4.2 million, or 63 percent, of the net 6.7 million private sector new jobs, according to Janemarie Mulvey, chief economist for the SBA Office of Advocacy. They contribute 43 percent to economic activity, or GDP growth, Ms. Mulvey said.

"I believe that entrepreneurship is the answer to economic woes of this century," said Babs Carryer, an adjunct professor of entrepreneurship at Carnegie Mellon University and the University of Pittsburgh, as well as editor of the New Venturist blog.

She said big firms tend to shed as many jobs as they add, and the actual growth comes from small businesses.

What is most valuable about those small business jobs, said Ann Dugan, executive director of the Institute for Entrepreneurial Excellence at Pitt's Joseph M. Katz Graduate School of Business, is that they are often more reliable than jobs at large corporations.

"They might not be bringing in 300 new jobs, but they are providing typically steady employment," said Ms. Dugan, who is leaving her post early next year. "They don't have the dips and valleys that you see in publicly traded companies that are dealing with quarterly results."

And entrepreneurs often invest in their businesses when larger companies wouldn't.

After starting his business at age 21, Mr. Childs didn't turn a profit for about four years.

"It's really hard to not want to put money back into your business," he said. "So as I was making money, I would reinvest it in my business."

He launched an aggressive advertising campaign early in his career -- one he admits he couldn't really afford but one he swears helped his business grow.

Money is often a problem for entrepreneurs, and small businesses are some of the biggest consumers of financing, which in turn spurs economic growth. Small business loans accounted for 67.32 percent of the value of all business loans outstanding in 2012, the most recent data available, according to the Small Business Administration. And nearly a quarter of all small business loans go to startups.

But when loans are not readily available -- as many entrepreneurs came to find during the recent credit crisis -- people get creative.

Entrepreneurs can often team with "angel" investors, wealthy individuals or groups of people, who invest in a startup for equity.

For Mr. Childs, such an avenue did not exist when he sought to open his business. After being rejected by eight banks for a startup loan, he took out cash advances on seven credit cards totalling $2,000, borrowed $5,000 from a financing institution at a high interest rate, sold his motocross bike and car, and got to work.

As the economy has recovered, small businesses are finding it easier to acquire financing through conventional bank loans, Ms. Dugan said.

"We're starting to see that come back," she said. "That did constrain growth. It also allowed new funding vehicles to come in."

Recently, crowdfunding has emerged as a viable method for funding, which allows a large group of people to make small investments in a project or a business.

One Pittsburgh startup, Crowdasaurus, seeks to connect entrepreneurs with big companies, organizations and nonprofits that are looking to invest in local projects.

"Limited cash makes you find creative solutions to difficult problems," said Josh Lucas, one of the founders of Crowdasaurus.

These types of creative solutions are among the biggest ways entrepreneurs can impact the economy, Ms. Mulvey said. "Some would argue that their value is understated because we cannot adequately measure their contribution through technology and innovation," she said in an email.

She pointed to two large companies, born in the past 20 years, whose innovation led to significant growth and whose business practices are mimicked everywhere: Google and Facebook.

"Human beings are hard-wired for change and innovation and making the world a better place," Ms. Carryer said. "The only way that happens is by startups bringing those things to market. Once people start to think entrepreneurially, it changes who they are."

While entrepreneurship requires innovation, it also requires risk. The majority of startups won't survive to celebrate their five-year anniversary, and two-thirds of startups do not last past 10 years, according to the Small Business Administration.

Ms. Carryer considers Pittsburgh to be a haven for entrepreneurship because of all the resources available. Both Carnegie Mellon University and the University of Pittsburgh offer support to entrepreneurs through places such as IdeaLab and the Institute for Entrepreneurial Excellence. The city is also home to AlphaLab, a startup accelerator on the South Side.

But there are also challenges to growth in Pittsburgh, she said. There is a small community of investors, and startups struggle to find places to sell their products because most of the city's bigger companies are unwilling to adopt new technology.

"In the past, we didn't really make stuff," Ms. Carryer said. "We made stuff that went into other stuff. People say of Pittsburgh, 'It lacks money. It lacks talent.' It doesn't work that way. I think we fundamentally lack customers."

Ms. Dugan said Pittsburgh was slow to embrace an entrepreneurial boom that enveloped the country in the past 20 years because the city has a history of relying on big, multinational corporations for employment.

"The No. 1 indicator of your success [as a small business] is if your parents have been an entrepreneur," she said. "You don't have a lot of parents that were entrepreneurs."

That mindset is changing, she said, as fewer people are finding jobs in big corporations.

Instead, they turn to small businesses or create their own.

Mr. Childs never viewed college or a job in a large company as his best option. He opened a candy store in his house in the sixth grade and operated a snow cone truck at age 17.

He now owns three lines of eyewear stores -- Eyetique, Three Guys Optical and Norman Childs Eyewear -- and also has a line of designer frames that is attracting interest from around the country. He has immediate plans to expand to 15 stores, including one in Cleveland, and hopes to grow to 20 within 12 months.

He is proud to be able to employ a lot of people in a business he started 34 years ago.

"We have about 70," he said. "Hopefully it's going to be a lot more."

Michael Sanserino:, 412-263-1969 and Twitter @msanserino.

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