Although large employers in Northern Nevada often grab the spotlight, small businesses employ the vast majority of workers in the region. To be sure, Males and his staff are assisting many of these enterprising Northern Nevadans who crave self-employment. Thanks to classes, loans and networking, many already have achieved their greatest life dream and challenge: being their own bosses. Indeed, small businesses are a major reason that Nevada — Northern Nevada in particular — has a consistently growing economic base and is the focus of this month’s cover story.

That isn’t changing anytime soon. While they come in a variety of shapes and sizes, including businesses that consist of one employee — the owner — and many that are home-based enterprises, small businesses are growing, and more are opening every year. Diverse funding sources, advocates and government entities are available to help them deal with the challenges of starting up and strategically planning their businesses.

“Small business is going to [continue] to be strong because of general growth in the area,” says Males, whose office is based at the University of Nevada, Reno. “Growth creates opportunities for small business.”

Strategic partnerships

Even as local drivers bemoan an influx of new people, and schools search for ways to meet the needs of Northern Nevada’s ever-growing student population, organizations such as the NSBDC, Nevada Microenterprise Initiative and the Small Business Administration are adding programs to make small businesses stronger and more affluent.

Local chambers of commerce also are enticing small businesses to join their ranks and take advantage of information, education and networking opportunities. Indeed, recruitment and outreach are strong components of chamber activities.

One regional group, The Hispanic Chamber of Commerce of Northern Nevada, has launched a new membership drive in the area.

“We’re revisiting our membership benefit packages and trying to provide more technical assistance, workshops and networking opportunities that will hopefully have a big impact on the growth of businesses,” says J.R. Gonzales, a consultant for the organization. “One of the things all businesses should be aware of is the rapid growth of the Hispanic population. The Hispanic chamber is a great catalyst to meet [other business owners] and do some outreach in the market.”

To this end, the NSBDC is one of many organizations working with the Hispanic Chamber to foster growth in Northern Nevada.

Hopeful entrepreneurs

For example, a recent addition to the Hispanic Chamber team is an employee whose salary is paid through a grant from Wells Fargo to the NSBDC. The employee works one to two days a week at the Chamber’s office. He helps small business owners and hopeful entrepreneurs wade through the many necessary and confusing requirements of business ownership.

“He’ll walk them through how to start a business, help them fill out paperwork, do whatever is necessary,” Gonzales says. “He gives them counseling, advice on how to start a business or how to take it to the next step.”

The trend for organizations such as Nevada Microenterprise Initiative, which helps start-ups and grows existing small businesses, is to offer services a lot of businesses don’t even know they need. Deborah Prout, executive director of NMI, says that just getting people to understand what makes a small business succeed can be daunting.

“We will do a feasibility analysis,” Prout says. “We answer questions such as: ‘Will I be able to make money at this idea?’ and ‘Am I doing it on the front end instead of the hard way?’”

Banking on success

Prout says many fledgling business owners get excited and jump in before they’ve taken the time to ensure they are not wasting money that took years to save.

“The wonderful optimism is that if you build it, they’ll come,” Prout says. “The consequence of build it and they don’t come is dire.” Some small businesses disappear before getting a chance to prosper because owners who can’t get a loan, pull out credit cards and quickly build up debt that they aren’t able to pay off. “It’s not the wisest way to capitalize a business,” Prout adds. “And not everybody has a credit card to max out.”

Commercial banks generally won’t fund someone who doesn’t have traditional business experience, such as a business degree or previous ownership. Even experience and a degree won’t get a loan for someone who has filed a bankruptcy or simply has no assets. This means a lot of people with good ideas and the drive to succeed have few places to find capital, she says. NMI offers loans, including SBA-funded micro loans. The group is the only SBA intermediary for micro loans in the state of Nevada.

“This is a way to be sure people across the socioeconomic spectrum get help,” Prout says. “It’s not always sexy stuff, but it is the backbone of our economy,” she says of small business enterprises. NMI assists everyone “from the person who is doing floor cleaning or janitorial work or construction work or the contractor who used to be a subcontractor,” says Prout. Micro loans cover expenses of less than $5,000 — often enough for someone who only needs a full toolbox or a more reliable car to get started.

Case study

Jerry Barr, owner of the mobile washing company Jerry’s on the Spot, left a job of 20 years and felt sure that he could run a successful business of his own. But banks didn’t agree. “I kept calling places to get a loan, but nobody would give me a loan,” Barr says. “I had claimed bankruptcy, so no one would help when I wanted to start this business. But (the bankruptcy) was a Chapter 11, so I paid it back. I paid it off when I sold my house, and then I was debt free.”

Still, lenders were leery. They didn’t care about his 20 years of reliable employment or the bankruptcy that he had paid off. “I just kept calling and calling. Finally, someone told me to go to Nevada Micro,” he adds. “I called (Prout), and she was the only one that helped me. It was incredible.”

Prout helped Barr get an interest-only note on which he was allowed to make very small monthly payments. He opened in October 2005.

“Now I’m looking to pay it [the loan] off because things have gone that well for me,” Barr says. “I’d go out and sell more, but I wanted to get through my first year with only one trailer. [But] It’s not happening. I’m putting together another one as we speak; the first one runs all of the time.”

The goal of NMI is to get business owners ready to approach banks and create prosperous relationships for both entities. “Our job is to get them started and then make sure they become bankable,” Prout says. “It is not our intention to keep the client forever. We’re hoping to turn them back to the banks.”

Forging relationships

Indeed, small businesses are smart to develop relationships with banks, says David Leonard, director of the SBA of Northern Nevada. The SBA has been working to recruit banks for the CommunityExpress program. Focused primarily in rural Northern Nevada communities, the program brings together banks and small businesses.

The SBA decides which clients are eligible for loans, and from there participating banks are directly involved in the loan process. This means small business owners start building a dialogue with a bank while receiving capital they otherwise might not have been able to get.

Another initiative of the SBA is aimed at helping small businesses earn the certification necessary to bid on federal contracts.

“The federal government sets aside 23 percent of all federal contracts for small business,” Leonard says. “Certification allows small businesses to go ahead and seek federal contracts, expand their horizons and seek new customers.”

The SBA also can sometimes provide financing for small companies that need to expand or fix large pieces of equipment before bidding on federal contracts. An additional goal is for small companies to “hook up” with larger Nevada companies, he says.

“We’re doing matchmaking,” Leonard says. “We want to match our companies here in Nevada with contracts that are available to make sure they are not going out of the state.” This includes education, training and technical assistance through the SBA, the Service Corps of Retired Executives and the Veteran’s Business Outreach Center.

“We need to provide growth [assistance],” he says with conviction. “Creating a strong community is taking care of businesses you’ve already got and providing avenues for new businesses to start.”

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Clients are getting wind of new energy technology

By Brandy Dela Vega

“Away out here they’ve got a name for rain and wind and fire. The rain is Tess, the fire’s Joe … and they call the wind Mariah.” These lyrics from the Lerner and Lowe Broadway musical, “Paint Your Wagon,” serve as inspiration for a small Renobased company that wants to change how people view wind power.

The three co-founders of Mariah Power Inc. have developed what they believe is a low-cost, easy-to-install alternative to traditional wind turbines. “What is great about the cyclo energy turbine is that it is a plug-and-produce installation,” says Mike Hess, co-founder and CEO. “It has no propellers, is silent and at 30 feet tall fits below most zoning restrictions.”

Unlike horizontal-plane turbines, which require a tower and propellers, the vertical cyclo energy turbine resembles a stiff wind sock that rotates with the wind speed and can produce roughly 25 to 30 percent of a customer’s electrical needs, or up to 1 kilowatt of power. The turbine, which costs about $3,000 per unit, is designed to be a complement to the grid since wind power can be unreliable.

Collaborative approach

Sierra Pacific Resources got wind of the company’s innovative approach back in 2004. The utility was sufficiently interested to fund the building and testing of the turbine at the University of Nevada, Reno through a program sponsored by the National Renewable Energy Laboratory.

“Our work focuses on up-and-coming devices that show promise for conservation purposes,” says Larry Holmes, Sierra Pacific’s manager of customer strategy and programs. “We stretch that program to include Mariah’s proposal because it looked exceptional to us.” By modifying a century-old technology called the Savonius rotor, the company was able to double the turbine’s energy capture, says Chris Gabrys, Ph.D., Mariah co-founder and chief technology officer.

Angel support

The research was promising enough to garner a $500,000 investment from the Sierra Angels investing group last August, and Mariah Power Inc. was born.

Although both Hess and co-founder/VP of sales Tim Rodgers are self-confessed serial entrepreneurs, the experience of attracting venture capital to Northern Nevada was a learning experience.

“The whole idea with starting with an Angel group was to better understand our marketplace,” Rodgers says. “We have a good Angel group here and in Sacramento, but this area still is about 50 years behind the Bay Area in terms of capital venture.

“There is much more wealth there.” Hess knows this all too well as he travels often to the Bay Area to meet with possible investors. Besides raising capital, other challenges face a wind power company in Nevada.

“Nevada doesn’t have as many incentive programs for wind power that California does,” Hess says. “So right now, California is our biggest market.” Still, they are hopeful Northern Nevada will be equally strong in coming years. Indeed, Nevada is one of 31 states that allow net metering as an incentive to use renewable energy.

Forefront of technology

Aside from this specific challenge, all three co-founders agree that Northern Nevada is the prime location for the company’s administrative, sales and marketing efforts. “The key thing is that this is a friendly place to develop technology,” Hess says. “There are so many people here with so many skills they are willing to share,” he says, referring to entities like the Desert Research Institute and the University of Nevada.

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Women business owners have a strong advocate

By Marian Chang

Deborah Prout spent 18 years working in the public policy sector in Washington, D.C. When she moved to Reno 15 months ago, she didn’t know her new job as president and CEO of the Women’s Business Center would allow her to use her advocacy skills once more.

“I thought I’d left that side of my life [behind] forever, but we need to be advocates for small business and work to help entrepreneurs,” Prout says with fervor. In most cases, “Economic development policies look out for the larger businesses, but we want to be the voice of the very small businesses — the little guys and gals.”

The Women’s Business Center, which is located at 113 W. Plumb Lane in Reno, is operated as a division of the Small Business Administration and is hosted by the Nevada Microenterprise Initiative. Prout and coworkers offer small loans or “microloans” — $2,500 to $35,000 — to very small businesses or “microenterprises.” Typically, clients who walk through the doors have been refused bank or credit union loans, may have sketchy credit and need to become “bankable” again.

The Center offers business information and long-term training for female entrepreneurs as well as best practices, computer and Internet training and access, individual and group business counseling, access to the SBA’s programs and services and more.

In her position at the Center, Prout offers small business consulting and does fund raising and lending all mixed together with a “social justice” agenda.

“We have three initiatives here,” Prout says. “We provide entrepreneurial training and a 12-week course on assessing business feasibility; we also provide technical assistance on a one-on-one basis, discussing problems, ideas, plans and strategies to get business capital. Finally, we have a microloan program, which fills a very important niche in the market.”

Prout assists women from all walks of life and hears numerous “war stories” along the way. She recently loaned $35,000 to a woman going through a divorce who had been in business with her husband, but now wanted to restart a piece of that business on her own, driving pilot cars for manufactured housing companies. The woman borrowed $5,000 to get started, and when she felt established and had equipment and a crew together, she came back to borrow $30,000 more.

“The people we serve are just women who want to provide for themselves and provide for their families,” Prout adds. “So many people walk around with a secret dream for a business, and we’re here to help them realize those dreams,” says Prout. “Small businesses provide opportunities for personal growth as well as growing capital.”

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Company’s product illuminates a touchy subject

By Jennifer R. Baumer

Understand.com’s business is to help bring clarity to a potentially distressing event in many people’s lives: major surgery. Understand.com — originally UnderstandSurgery.com — was formed in response to owner Darik Volpa’s nine years working in marketing and sales for Stryker, a medical device company. His job took him to doctors’ offices, where he watched overworked surgeons and confused patients trying to communicate. Patients were scared and bewildered as they approached surgery, and physicians, often overwhelmed with demands on their time, were unable to communicate clearly what the surgeries would entail.

“Traditionally a doctor will draw something on a piece of paper, or give the patient a pamphlet or brochure, verbally explain the procedure and have an anatomical model to point things out,” says Volpa. “When the doctor explains what’s going to happen and they’re going to do this and that and cut and drill and take this graft, people’s eyes just glaze over. Plus reading about surgery is like reading model airplane instructions: It’s very difficult to grasp the concept.”

Patients were being sent home with pamphlets and brochures that did little to calm their fears. Volpa wanted to offer a solution beyond pamphlets and brochures. That was the genesis behind his current enterprise.

Animated answers

Relocated to Northern Nevada from Boston, Understand.com creates a library of Webbased animations, like movies, that teach people what will happen during surgery in a non-bloody, non-gory, non-scary way, says Volpa, president and CEO. “It’s an onlinebased service that patients can access from their homes in a non-threatening setting.” He says the animations offer clear, simple explanations of what’s going to happen during surgery and answer basic questions. Surgeons subscribe to the service by paying a monthly fee that ranges from $50 to $150.

An entrepreneurial startup founded in 2003 in Boston, the company is growing organically, according to Chuck Alvey, president and CEO of the Economic Development Authority of Western Nevada. “Darik came to our area because he liked it and wanted to be here,” says Alvey. “He came here and expanded the company … and it has roots in our area now.”

Volpa, who grew up in Fresno, moved the company to Reno because of its proximity to Bay Area customers and University of Nevada, Reno talent pools. In three years, he’s thriving, thanks in part to the demand for his company’s unique product and because of Nevada’s business-friendly tax structure.

International appeal

While the majority of the company’s 800 customers are in the United States, Understand.com has clients overseas in such places as Germany, Vietnam and Saudi Arabia. Corporations that sell health and medical devices and products sponsor and exclusively distribute entire segments such as sports medicine or spinal surgery. Sponsorships can exceed $20,000 per month. Currently, Johnson & Johnson and Stryker both are sponsors.

At present, Understand.com is privately held. To fund future growth, the company’s team and advisors are exploring several options. One is to grow at a slow and steady pace or to ramp up — but diluting ownership — with the backing of venture capital groups and angel investors.

“That’s the million-dollar question for any young, growing company,” says Volpa. “Do you continue to fuel growth organically or seek outside interest and help to expedite growth? We’re going to figure that out.”

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Cleaning up: Detailers, stagers profit from slowing home market

By Zack Hall

Reno native Chris Gardella is no stranger to starting a business.

But the 33-year-old small business owner believes he is on to his best idea yet — Showcase Home Detailing Team.

Gardella, who has owned an auto detailing shop, a car-cleaning chemical distributorship and was in the interior design industry, started his home detailing business in July. The idea is simple: Clean every crevice of a house and its outside landscaping to give a home for sale better “curb appeal,” making the outside more attractive to passers-by.

Responding to the market

With the housing market facing challenging times — lots of homes and fewer buyers in Northern Nevada — Gardella hopes his service can give home sellers an extra edge. “With the packaging of services, it can make it easier for the consumer and the real estate agent — making it one phone call for them,” says Gardella.

His idea is an ambitious one. He likens it to his car detailing business — except Showcase HDT deals in houses.

Guerrilla tactics

Gardella has sought help from his cousin, Catherine Gardella, who owns Reno-based marketing firm Forward Marketing. She has helped Gardella get the word out, and another friend has helped with the company’s logo.

He also sought the help of the University of Nevada, Reno’s Nevada Small Business Development Center to develop the idea. Gardella, whose ultimate goal is to franchise the business to Las Vegas, Sacramento and beyond, has experienced the same struggle many startups have — advancing his idea to the point where it can sustain him financially.

“It’s been a little bit challenging to get my idea across of home detailing,” Gardella says. “It’s definitely a new industry that is going to take off. It’s just that I am kind of the pioneer just getting started.”

The company charges at 60 cents per square foot, but the range can go higher depending upon the amount of work involved, Gardella says.

Gardella says his business is complementary to home stagers, a more established business that upgrades a home with painting schemes and often-times loaned furniture — turning a lived-in home into a model similar to what many developers show off.

Both types of businesses aim to give a home an advantage in the resale market by accentuating the property’s best attributes.

Setting the stage

It’s something that Leeann Agee, as owner of Reno-based First Impression Home Staging, knows well.

Agee, a San Francisco Bay Area native who started First Impressions five years ago, says the market for home staging has grown more competitive as homeowners look for a way to stand out in the resale market.

“(Home staging) has always been important — people are just realizing it now,” says Agee, who got the idea to start First Impressions from the Bay Area, where staging has been more common.

Most stagers work on an hourly consultant basis. Most jobs have a set-up fee with additional monthly rental charges. Costs range from $100 to $200 for simple consultations to tens of thousand of dollars, depending on size and extent of each project. Agee, 54, who worked in San Francisco’s Financial District for 10 years and has a bachelor’s degree in art history, says her primary market is for homes of $1 million or more. But she said she also has done a lot of consulting work for more modestly priced homes in the area.

That extra edge

Gardella is banking that a slowing housing market will compel home sellers to gain a competitive advantage through his services in the resale market.

And combining his and a stager’s services, he said, should give a homeowner that edge. “You have to have the competitive edge, especially in the market we are in now,” Gardella says. “And the competitive edge in this market is having your property in the best possible condition it can be in.”

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New bank eyes coveted small-business market in Douglas County

By Bill O’Driscoll

Dan Dykes abides by the adage, if you see a need, fill it. And he sees a need for community banking in Douglas County.

For several years he has watched the thriving industry take root across Northern Nevada. Now he’s planting his own, Carson River Community Bank, not far from the namesake stream and smack in the middle of the commercially fertile northern end of the Carson Valley.

As he neared his goal of $10 million in initial investment and regulatory approval for an October opening, Dykes says he appreciates those fiercely aggressive community banks which already have made their claim in the coveted small-business market in Northern Nevada.

“They developed over the last 15 or so years a more permanent niche for community banks,” Dykes says, citing Reno-based First Independent Bank as the poster child for successful community banks.

Now comes Carson River Community Bank, borne, Dykes says, out of suggestions he received from area residents after the Las Vegas banker bought property in Douglas County five years ago. “Go to the Carson Valley, and from here south, they’re not served well by community banks,” Dykes says. “The market share rests with Wells Fargo, Nevada State and Bank of America.”

Local ownership

Las Vegas-based Business Bank of Nevada has a branch in Minden some miles south of the Douglas-Carson City line near where Dykes (who spent much of his growing-up years in Northern Nevada) is setting up shop.

“Business Bank has done a good job — they’re very aggressive with their marketing plan — and Jerry Gregory is a great face man for community banks,” Dykes says of Business Bank’s vice president in Northern Nevada.

“But with all due respect to Business Bank, we’ve got local talent and local ownership,” he says of his staff as well as his investors who so far are three-fourths locals.

Whether Carson River Community Bank can match the profitability enjoyed by other small banks in the region in recent years remains to be seen.

The general business climate still is favorable for starting up a new bank, but not what it was a couple of years ago, says Tom Cargill, longtime industry observer and economist at the University of Nevada, Reno.

He cites the interest rate spread, what a bank pays out in interest versus what it charges for loans, which has narrowed with rising rates. That pinches the profit margin.

Add in ever-increasing competition from other banks as well as nonprofit credit unions, and the challenge is on for Carson River Community Bank.

“It’s a less-favorable environment. It’s still positive, but not nearly what it was,” Cargill says.