Home businesses on the upswing in tough economy

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Home businesses on the upswing in tough economy

by Scott Spjut

Mar 18, 2010 | 661 views

http://www.tooeletranscript.com/view/full_story/6765835/article-Home-businesses-on-the-upswing-in-tough-economy?instance=home_news_left

- photography / Maegan Burr" title="Tim Smith points out areas on a bicycle that need new grip tape Monday afternoon. Smith runs a licensed bike repair shop out of his garage. So far in 2010, Tooele City has approved 78 home business licenses, up from previous years.
- photography / Maegan Burr" style="border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; max-width: 250px; float: none; margin-top: 10px; margin-right: 10px; margin-bottom: 10px; margin-left: 10px; text-align: left; ">

Tim Smith points out areas on a bicycle that need new grip tape Monday afternoon. Smith runs a licensed bike repair shop out of his garage. So far in 2010, Tooele City has approved 78 home business licenses, up from previous years.
- photography / Maegan Burr

Chris and Rebecca Busico, of Tooele, both worked at Deseret Chemical Depot until 2008. When they were getting ready to have their second child and knew layoffs were on the horizon, they decided to re-evaluate their employment situation.

“We were both making pretty good money, but we didn’t want to both get laid off at the same time,” Chris said.

So with the help from his uncle, Chris started a lawn care company that focuses on fertilizing, weed control and pesticides. The business is now in its second year, and has doubled its customer base, he said.

“My uncle gave me a bunch of customers to get going,” he said. “We’re doing better than we expected.”

Busico’s story is more common today than even two years ago, when he launched the business. Tooele City has seen an increase in home-based business applications this year as more residents turn to self-employment as a way to weather a difficult economy. By mid-March of 2008 and 2009, the city had processed 56 and 59 applications, respectively. So far in 2010, the city has already seen 78.

“I think people who may have lost their job are going with a home business,” said Tooele City Deputy Recorder Lisa Carpenter. “They’re trying to come up with creative ways to bring in an income.”

But sometimes those creative ways run counter to established laws and codes — such as the need for a business license.

That’s why Carpenter scans the newspaper these days to make sure advertising home businesses have their city paperwork in order. She also occasionally pounds the pavement, as was the case last Friday when she noticed two men selling hand-made beaded bugs, coins, mugs and vinyl records at Vorwaller Homestead and RV Park. They didn’t have a license.

“I told them, ‘You should be grateful it was me who came by and not a cop,’” Carpenter said.

As part of Tooele City code, any resident offering a service for compensation needs a business license. This includes daycares, tutors, any sellers of merchandise, freelancers and home repair services. There are exceptions, including yard sales, kids’ lemonade stands and teenagers mowing lawns. Non-profits must also get licensed, but for them the city will waive the $40 fee.

“Anytime you’re making money, you should be licensed,” Carpenter said. “We’ll work with them, but it’s always good to be informed and ask regarding all types of businesses.

Tooele County also requires licensing for home businesses, although county officials haven’t noticed the same uptick in startups as city officials have.

The county approved 58 home occupation applications in all of 2009, and has approved eight so far in 2010. Most applications are for general home offices or various consulting ventures. But the county also receives applications for hair salons, flower shops, candle stores, dog treat productions and even belly casting for pregnant women.

The home occupation application is used to gauge how many deliveries or pickups will be made at the home, how many customers will be visiting the residence regularly, what type and how much product will be stored on site, and what the hours of operation will be, regardless of the type of business.

“It’s more about the impact on the property and the neighbors,” said Kent Page, Tooele County senior planner. “We don’t want to have the character of the residence or of the neighborhood changed. We don’t want unusual noise or traffic.”

For most entrepreneurs, licensing is a minor hurdle to overcome compared to the uncertainty of starting a home-based business.

Abe Patterson, of Stansbury Park, had been thinking of opening up a business in his home for a few years, and was recently approved for a property maintenance operation. His work will focus on repairing rental properties in between leases and tenants.

“I just saw a possible niche,” Patterson said. “I know a lot of unemployed contractors, and would like to get people working and get them a little extra money.”

His home would work as a central office where he could dispatch people for work and do general bookkeeping.

“I would like the added income,” he said. “But more so lately, I would like to help people out.”

Brenda Marquette of Lake Point took early retirement from Alliant Techsystems two months ago after 30 years of working for the aerospace and defense contractor. She started the paperwork for her own home business before she retired, and is in the process of finishing it. She plans to do part-time contract work in line with her expertise.

“Larger companies are looking for contract help, rather than hiring new employees they may have to train and then lay off,” Marquette said. “I see it as an opportunity to still utilize the skill set I have.”

For others, a home business is a chance to turn a hobby into a little extra spending money.

“I’m a cyclist, and there’s no shop available about here,” said Timothy Smith, who runs a bike repair shop out of his Stansbury Park garage in his spare time. He works full time as a radiologist at Mountain West Medical Center.

He’s considered opening his own bike store some day, but doesn’t anticipate being able to get a loan from the bank. In the meantime, he’s content with working on whatever bikes he can.

“I’m not as busy as I’d like to be,” Smith said. “It’s an interesting adventure. And it’s not an easy one.”

Page feels starting a home business is a good option for many county residents.

“It seems like that’s the first step. Try something at home, without investing a whole lot of money into it, and then build it from there,” he said. “We’re trying to be sensitive to the economy. We want to allow an individual to do what he wants with his property, as long as it doesn’t affect his neighbors.”

The county is currently considering different zoning options to help home businesses, Page said. They feel a new zoning category, something between residential and commercial, may help.

“The code is here to serve us — not us to serve the code,” he said. “But we haven’t put anything in writing yet. We’re just brainstorming.”

Scott Spjut: scottspjut@tooeletranscript.com

John Zogby: What American Dream?

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The Way We'll Be
What American Dream?

http://www.forbes.com/

John Zogby, 03.18.10, 12:01 AM ET
A year ago there was real concern that the U.S. economy might fall into what economists consider a depression. That type of depression did not happen, but our polling finds strong evidence of another kind of depression: a loss of faith in the American Dream.

Zogby International has been testing the public's beliefs and definitions of the American Dream for more than a decade. Our latest Zogby Interactive survey shows a significant decline in believers from a year ago and an even bigger drop from 10 years ago.

On the basic question of whether "it is possible for you and your family to achieve the American Dream," 57% said it is possible in a Feb. 17 Zogby Interactive poll of 2,031 likely voters. That is a 10-point drop from a similar survey conducted immediately after the 2008 elections. When we asked that question in July 2001, less than two months before the Sept. 11 attacks, 76% said they could achieve it.

As some readers may know, I've studied people's attitudes about the American Dream at length. It served as the subtitle of my book, The Way We'll Be: The Zogby Report of the Transformation of the American Dream. I have found the American Dream evolving and enduring. In that book, I wrote:

"The American dream still exists; it's not going anywhere. But in so many ways, it's being refashioned and repackaged to reflect the new circumstances of so many of our lives ... The new American dream, I've found, is far more textured because the American experience at the start of the 21st century is so different from what it was just a half century ago. We still dream great things for our children, but today we do so within the context of the new limits in our own lives."
Our standard set of questions about the American Dream measures those "new circumstances" and "textured" ideals. From these questions, I've formulated four categories of American Dreamers: Traditional Materialists who define it as material success; Secular Spiritualists, who see it more through spiritual fulfillment; Deferred Dreamers, who believe their children are more likely to attain it than they are; and finally the Dreamless Dead, who say neither they nor most middle-class Americans can achieve it materially or spiritually.

Compared with November 2008, the first three categories remained stable. The percentage of Dreamless Dead jumped from 12% to 20%. We found this pessimism increasing across all demographic groups. Predictably, the jump was greatest among those earning the least (annual household income below $25,000), going from 19% to 44%. Other groups that also had higher increases of Dreamless Dead included women, political independents and those without college degrees.

Clearly, a very weak job market is the prime cause for this loss of hope. A poll released this week by ABC World News found 28% of middle-income Americans and 39% of lower-income earners say someone in their household has been laid off or lost a job in the last year. In a recent ABC/Washington Post survey, 57% of middle-income Americans and 68% of lower earners said the U.S. economy is in "long-term decline."

It certainly seems as though people see the current recession as more than just a down period in the normal business cycle. Last month I wrote here about the deep loss of confidence in our major institutions, especially in big business, banks and government. Actions taken by leaders in both the business and political realms have given people in the political center, left and right very good reason to lose faith. Each can cite their own litanies of what they see as failure and even contempt from the nation's most powerful people.

More alarming may be the self-fulfilling prophecies that this skepticism cultivates. For the economy, people are more likely to hunker down and diminish any chance that consumer spending will restart the economy. For government, cynicism moves people away from the process, pushing political discourse further to the extremes and making government even more dysfunctional and less responsive that it already is.

None of this can be separated from rapid and all-encompassing technological change that is altering both our personal and institutional relationships. Inevitably, our institutions must change to keep up.

I am an optimist; in this case about America and its dream, and about those who will sort through and find solutions, the under-30 generation I call First Globals. What Winston Churchill said in 1947 is still true: "Democracy is the worst form of government, except for all those other forms that have been tried from time to time." It may take some time, but the generation that has grown up wired, connected and open to the world will make our institutions responsive again, and perhaps create new ones.

They will also keep the American Dream, and continue the path that defines it not as material, but as personal and spiritual fulfillment. Carpe diem.

John Zogby is president and CEO of Zogby International and the author of The Way We'll Be: The Zogby Report on the Transformation of the American Dream. He writes a weekly column for Forbes.

Outlook for job market is grim

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Outlook for job market is grim
Updated 1/8/2010 8:13 PM

http://www.usatoday.com/

By Paul Wiseman, USA TODAY

As they scoured the job market and counted down the days to graduation last spring, most of Christopher Hutchens' friends at Johns Hopkins University decided the transition to real life could wait: They'd seek sanctuary in graduate school until the economic thunderclouds cleared.
Hutchens' prospects were sunnier. His coursework at Johns Hopkins had prepared him for one of the nation's hottest careers: biomedical engineering. He landed a good job at a Philadelphia maker of medical devices — though even he didn't get the offer he wanted until the last day of classes.

Hutchens is one of the lucky few. Prospects for most job seekers are expected to be grim for years, no matter what Friday's government report on payrolls and unemployment shows.

Barring dramatic changes in economic policy, "We're going to have high unemployment for the next few years," says former Labor secretary Robert Reich, now professor of public policy at the University of California-Berkeley. "Even when the jobs come back, they're not going to be very good jobs."

Even as economic growth recovers from the deepest recession since the 1930s, many U.S. jobs will continue to move overseas or be replaced by technology. And consumer spending, which fuels economic and job growth, is likely to remain weak as households continue to sober up from the credit card, home-equity loan binge-spending of the past decade, economists say.

"It's going to be a long slog," says Steven Cochrane, managing director of Moody's Economy.com.

Moody's expects the unemployment rate — 10% in November — to remain high. The past couple of decades, joblessness has hovered around 5%. In the next decade, Cochrane expects it to stay closer to 5.7%.

"All signs point to a rocky recovery," says economist Heidi Shierholz at the Economic Policy Institute. "We will likely see elevated unemployment for at least the next five years." She reckons joblessness could still be stuck at 8% in 2014.

The economy must clear some imposing hurdles, Shierholz says:

•State governments, their tax revenues eroded by the recession, are slashing programs and jobs to meet balanced-budget requirements.

•The Federal Reserve, having pushed short-term interest rates close to zero, doesn't have many tools left in its economic fix-it kit.

•Consumers, whose spending accounts for 70% of economic activity, are exhausted after years of piling up debt and splurging on everything from iPods to vacation homes.

The Bureau of Labor Statistics expects consumer spending to grow 2.5% a year from 2008 to 2018, down from average annual growth of 3% in the previous two decades. Spending on durable goods, excluding autos, will grow 4.9% a year through 2018, down from 8.1% annual growth from 1998 to 2008. Sales of cars and light trucks won't reclaim the heights they reached in the mid-2000s, when they surpassed 16 million a year: Government forecasters expect auto sales to hit 14.4 million in 2018. Foreign competition and automation will continue to kill manufacturing jobs: The government expects factories to cut 1.2 million manufacturing jobs by 2018.

"If you work in a textile mill, the days of your job are numbered," Moody's Cochrane says.

Still, the government's Bureau of Labor Statistics expects the overall economy to generate 15.3 million new jobs (not counting replacements) from 2008 to 2018 and forecasts 5.1% unemployment in 2018.

Where will the new jobs come from?

Depends on how you measure job growth. On a percentage basis, the fastest-growing occupations of the next decade tend to pay well and to demand highly skilled workers.

Computer network and data analysts (median wage: $71,100) will see their ranks surge 53% from 2008 to 2018, the government predicts. And financial examiners, who ensure that companies are complying with financial laws and regulations, will grow in number by 41%. Their median earnings: $70,930. (The median wage figures — half earn more, half less — are from May 2008.)

A 'cool' future for some

Seeing the fastest job growth at 72% through 2018 are biomedical engineers (median wage: $77,400). "I can see myself staying in the medical device industry," says Johns Hopkins grad Hutchens. "It's only growing. There are going to be a lot of cool projects to work on."

Johns Hopkins' undergraduate biomedical engineering program turns out about 100 graduates a year. They find a wide range of employers, says Julia Galeazzi, associate director of the university's career center: private companies seeking to design medical devices; the Pentagon looking for ways to counter bio-terrorism; the U.S. Patent Office hiring engineers who understand the latest medical gadgets. One recent graduate was dispatched to study whether cellphone frequencies pose any health risks. "The opportunities are so vast," she says.

The trouble is, the top-paying occupations are a minuscule component of the labor force: Biomedical engineers, for instance, will account for just 12,000 of the more than 15 million new jobs expected to emerge through 2018.

Measured by sheer numbers, the new jobs of the next decade don't look nearly as lucrative: The number of home health aides, for instance, is expected to expand by 461,000. But their median earnings come to just $20,460 — well below the median U.S. wage of $32,390.

Sonia Ortiz, 47, has been working in home health care for two decades in Los Angeles. She feeds the elderly and disabled, does their laundry, helps them take their pills, drives them to the doctor. She earns $9 an hour.

"It's very difficult to get by," she says. "You have to think twice about how to pay rent, buy gas, set aside a little money."

Spokane, Wash., home health aide Susie Young, 61, who's been in the business 22 years, says she sometimes thought: "I can go to McDonald's and make more money than I do now." She says wages and working conditions have improved since workers at her agency joined the Service Employees International Union in 2003.

Untransferable jobs

The economy will also demand 400,000 new customer service representatives, an occupation with median earnings of $29,860 a year; and 394,000 workers who prepare and serve food, including fast food, earning $16,430.

"These services have got to be done in person and so cannot be easily done, as so many manufacturing jobs can be done, by low-wage workers abroad," former Labor secretary Reich says. "They normally involve providing personal attention that can't easily be done by computers and software."

More than two-thirds of new jobs won't require any education past high school. For several decades after World War II, high school graduates could find decent-paying manufacturing jobs. But factories are shedding workers or closing altogether.

"It's much harder for someone who has a modest set of educational credentials to find the equivalent of an auto industry job," says Gary Burtless, senior fellow in economic studies at the Brookings Institution. "You can't just have a diploma and six months of on-the-job training, and expect to get wages and benefits equivalent to $18 or $30 an hour. Those kinds of jobs are much harder to get than they were in the '60s and '70s."

One bright spot: nursing. The country is expected to need 582,000 new registered nurses — a profession that pays a median $62,450 a year. Hospitals and doctor's offices in southwestern Indiana, southern Illinois and western Kentucky snap up nurses as fast as the University of Southern Indiana can turn them out, usually at starting salaries in the mid-$30,000s, says Ann White, assistant dean of nursing. But nursing isn't for everyone, she says. The university exposes nursing students to real clinical conditions as early as possible to weed out the squeamish and uncommitted. "You've got to want to be a nurse," she says.

Overall, the jobs market is stuck in an awkward place, says Daniel Stelter, a senior partner at Boston Consulting Group and co-author of the forthcoming book Accelerating Out of the Great Recession: How to Win in a Slow-Growth Economy. Old industries such as auto and steel manufacturing are shedding jobs; and promising new industries such as solar energy and biotechnology aren't mature enough to make up the difference. "Old industries are under pressure, and new industries are not yet big and strong enough."

He expects the U.S. government will attempt to salvage manufacturing jobs by promoting new industries and by exploiting a weak dollar, which makes U.S. exports more competitive overseas. Already, he notes, Germany's Daimler, citing the weak dollar, last month announced plans to boost production of C-Class Mercedes cars at its plant in Tuscaloosa, Ala.

For all the forecasts, no one really knows what the labor market will look like in a few years. In 2003, a quarter of U.S. workers were in jobs that didn't show up in government occupational listings in 1967, a report by the White House's Council of Economic Advisers noted last year.

"We don't know what technologies will be developed or what is going to happen on a national or global level," says Galeazzi at the Johns Hopkins career center. "Nobody can really predict what the job market will look like in 10 years. ... What we're trying to do is prepare our students to go out and be flexible."