Michaels and others like her look to automation not so much to control costs but to grow. The shortage of entry-level workers -- fewer people will come into the labor market in the '90s -- should force more incipient business owners to leverage technology. Smart companies will begin to use computers to think strategically. "You have to realize this is the way the marketplace is going," says former SBA economist Thomas Gray. "If you don't do it, competitors will, and they'll kill you."
Controlling Growth. Fewer start-ups can bank on riding a high-speed rail to $100 million in the '90s. Growth, when it comes, will come grudgingly. Many starting out today have resigned themselves to the dilatory ride. "I'm not looking to grow to a huge industrial complex," says Kitson Logue, who anticipates that growth without investors will plateau. "We may just have to slow the horse down a bit. But it's not going to break my heart."
In a similar spirit, Michaels casts a cold eye on growth, even though her earnings could support it. "We're not trying to blow the doors out," she says. "There's a danger when you achieve some success early on to expand, expand, expand. We're trying not to make too many mistakes. We want to go slowly." She says she will limit growth to four stores.
Is this a failure of courage or vision? Are these fainthearted entrepreneurs? Or do they have their eyes on other goals? Such as profits. And what they want out of the business. After all, when the business is personally financed, they have to be as attentive to the bottom line as to the top. Michaels became profitable within the first six months.
The Logues were profitable every month last year but one. "This year we'll drop 2% to 3% to the bottom line," Kitson notes. "We've got to be at least marginally profitable. Just in case we want to attract a banker. Besides, a loss comes out of our pocket."
Perhaps their measured approach to growth makes these businesses hardier ventures. Companies that grow more slowly are bound to have better control of their cash. Over time it may mean better growth and better profits.
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The marketplace today shows a start-up little mercy. Truth is, it's hardly been this difficult since Hoover. The evidence is only too plentiful: An economy lingering in anemia. Seed capital in scarce supply. Banks too troubled to lend. Real estate values tumbling. Corporate profits and expenditures down. Withered confidence and weak spending by consumers. Companies small and large competing for shelter in the bankruptcy courts. It makes the '80s start-up look like a garden party.
So how can it be any fun? The rewards of starting a company have never been less obvious. Why are so many nontraditional entrepreneurs daring it? Maybe because the business is not all there is to their lives.
What founders such as Michaels, Bettinardi, and the Logues seek is not mercurial growth. It's not a trove of equity or an army of dedicated and grateful employees. They don't long to revolutionize their industries or be lionized in the press. What they want, instead, is license. To work as they want, live where they will. To have a life, not just a balance sheet. To some degree, they are starting businesses for the reasons founders always have: Freedom. Control over their lives. Financial comfort for their families. Desire for autonomy and control consistently outranks wealth in surveys attempting to plumb the complex motivations of men and women who start businesses. But what distinguishes this generation of entrepreneurs is a conviction that their companies remain subordinate to (instead of a substitute for) the rest of their lives.
Maybe it's a return to simpler values. Ed Bettinardi wanted to live in the same house in the same Denver neighborhood. He wanted to be able to send his kids to college and someday retire. Susan Michaels wanted to call her own shots after a nomadic broadcasting career. She craved more time with her husband at their country home. Julie and Kitson Logue wanted to raise a family in South Bend, spend their weekends riding horses and rooting for the Irish. Surely, a thriving business could deliver all that.
But not at the start. Their humble ambitions notwithstanding, their infant companies, in every case, demanded the time and energy the founders had pledged to their personal lives. "It's taken more time, more money, more work, more everything," reports Kitson Logue. He and Julie have had to postpone children as a result. Since starting his business, Bettinardi sees less of the family he vowed to support. For Susan Michaels, the summer passed before she picked even one blackberry from the bushes on her land.
Not that you'll hear disappointment in their voices. Just patience. The rewards, if modest and hard won, are nonetheless sweet. "I'm a guy who should be out vaccinating dogs," says Kitson Logue. "Running this business, two days are never the same -- two hours are never the same." Three years into it, older, heavier, suffering from "bad guts," he concedes the returns have failed to come in torrents. "We haven't made a gigantic monster of a business." But he measures his yield in satisfaction, anyway. "You know, if the bugger went belly-up tomorrow, we'd still have a pretty good feeling of having accomplished something."
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