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Entrepreneurs adding side businesses despite economic crisis
Wednesday, July 01, 2009

Mike Friedberg has stacks of licensed sports gear in his garage and two partners who for the moment are going incognito. Harmony Kaiser has a salon on Perry Highway but has been spending her days off driving to a lab in Beaver County and making deliveries to retailers.

Both are ignoring the economic downturn and pouring their extra funds and time into launching new businesses on the side, even as they keep their day jobs.

It's not the easiest thing to do, according to Ann Dugan, founder and executive director of the Institute for Entrepreneurial Excellence at the University of Pittsburgh's Katz Graduate School of Business.

Lots of people have ideas, but not everyone who scribbles a proposal onto a napkin over drinks on Saturday night has the discipline and energy to begin working on a real business plan in the cold light of Sunday morning, she said.

And then there's the challenge of filling up any off hours with more work. "Everybody's tired at the end of a 10-hour day," she noted.

A U.S. Small Business Administration report to the president last year said that while millions of nascent entrepreneurs hope to start businesses, within five years about one-third have given up on the idea.

People typically start businesses on the side for a couple of reasons, according to Ms. Dugan. Many want to get into business for themselves but can't afford -- at least immediately -- to do it full-time. They still need a regular paycheck and benefits to support their families.

Another big driver can be fear. In the early to mid-1990s, Ms. Dugan said, there seemed to be a lot of people trying to get something going on the side, mainly as a hedge against the possibility of losing their jobs.

She's seeing less of that right now, perhaps because many think the market wouldn't support a new business. "I still think there's a whole lot of people sitting on the sidelines," Ms. Dugan said.

That doesn't include Mr. Friedberg or Ms. Kaiser. Refusing to downsize for the recession, they're dreaming big.

Mr. Friedberg sees the thousands of shoppers who visit a deal-a-day Web site called Wootalyzer.com and envisions similar crowds closely following his TeamCanteen.com in hopes of snagging a well-priced pair of Penguins gloves or a New York Yankees magnetic driver head cover.

Ms. Kaiser doesn't thinks it's too much to ask for her Mothers Milc natural hair care line in environmentally friendly packaging to sell across the country. "I would like to see the company go national," she said.

For now, whatever gets done in their side businesses gets done by a very small team.

The TeamCanteen.com site involves three partners who had been working on the idea for several months before opening for business in March. "We all currently have day jobs," said Mr. Friedberg, who works as a manager in the Mike Feinberg Co. in the Strip District that his grandfather founded.

One partner is in the Pittsburgh area, and the other in Columbus, Ohio, but neither wanted to be named. "It's not that we're necessarily underground. It's just that we're keeping a low profile," he said, joking that they're waiting until the business' success propels them onto the cover of Fortune magazine.

They talk daily and take what time they can after hours, on weekends or lunch breaks to work on the Web business. They've invested more than $10,000 into site development and merchandise.

And every day, they change the site to offer one item at what they consider to be a very good price. Examples include a white Notre Dame baseball cap for $11.99 and an Ohio State football jersey for $26. Merchandise is stored, for now, in their garages and basements.

The first day the site launched they didn't have any sales, but things have picked up since, in part because they've been trying to do some low-key marketing. Mr. Friedberg is thrilled when he sees regular visitors coming back daily who are neither friends nor family. TeamCanteen.com has been getting about 5,000 visitors a month.

Ms. Kaiser runs Harmony Salon on Perry Highway in Pine and lives in South Park, but she also drives to Beaver Falls about once a month to a lab that helped develop the chemical-free Mothers Milc shampoo and conditioner.

Developing the right formula was a two-year process and required an investment of several thousand dollars plus most of the free time that she and her husband, Chris, could devote to it.

It took a while to track down a source for the milk cartons they wanted to use, rather than a petroleum-based plastic bottle. A plea to Schneider's Dairy, based in Whitehall, finally got them a key phone number.

In January, they began offering the products, which are available online, in the salon and at a few retail stores such as The Good Life Market on Banksville Road. They've sold about 500 bottles since and are pitching other retailers on carrying the line.

The shampoo and conditioner are now sold in 32-ounce cartons running $49.50, but the plan is to start producing smaller cartons that would make it easier for people to try the line at a lower cost.

"When I'm not at the salon, this is pretty much my hobby," Ms. Kaiser said with a laugh.

Meanwhile, Ms. Dugan said many other would-be entrepreneurs continue to hesitate. The entrepreneur institute has been getting a lot of calls lately from people who think the U.S. government's various stimulus packages include money for starting new businesses.

When they find out there's no free money, she said, they reconsider.

Teresa F. Lindeman can be reached at tlindeman@post-gazette.com or at 412-263-2018.
First published on July 1, 2009 at 12:00 am