The new normal? Younger entrepreneurs, first-time business owners stepping to the plate in Northern Nevada
Special to the NNBV
RENO, Nev. — Dan Larson, new owner of the Frame Shop at Lakeside, says the idea to purchase the longtime business on Lakeside Drive came to him in a dream.
Larson and his fiancé had been looking to purchase a business for about a year. He’d worked as a master framer for two decades but left the industry in frustration after capping out financially as an employee. Larson knew about the Frame Shop — its previous owner once asked him to work as her lead framer when she purchased the business about eight years ago.
Larson decided to test the waters, and the two struck a bargain over lunch. With a simple handshake, the next Reno entrepreneur was born.
‘We have never been as busy’
At age 49, Larson is a bit longer in the tooth than many of the Millenial entrepreneurs who’ve helped create waves of new business and tech ventures in Reno and Midtown, but he’s far from alone in his desire to sail his own ship.
Older business owners continue to capitalize on the hot regional economy and sell their companies to the next generation of business owners, says Brad Bottoset, owner of business brokerage Liberty Group of Nevada.
Liberty Group typically brokers about 20 deals a year, Bottoset says, but the last few years business has increased between 25 and 50 percent. The company is on pace to potentially exceed more than 30 transactions this year.
“We have never been as busy as we are now,” Bottoset says.
Bottoset has brokered business transactions for the past two decades, including 19 at the helm of Liberty Group. Many recent sales are driven by Baby Boomers who are aging out of the workforce. Some missed their window of opportunity back in the frothy days of 2004-’05 when the economy last had legs, and they aren’t about to miss their chance this time around, Bottoset says.
“It created a situation where they were working twice as hard for half the money, but they couldn’t sell because they didn’t have a whole lot of cash flow – they were stuck,” he says. “As the economy improved, they are making money again and now have something to sell. They don’t want to make the same mistake twice.”
The allure of Northern Nevada to young entrepreneurs
Northern Nevada is seeing many younger entrepreneurs and first-time business owners step to the plate and take their turn at bat. Some are former middle managers tired of being caught between upper management and employees and now want their turn to be boss, while others are out-of-state buyers who’ve heard about the unprecedented head of economic steam being generated in this region.
One recent business transaction at Liberty Group was with a buyer from Milwaukee, while another was with an entrepreneur who hailed from the Southeastern U.S.
And many others are crossing the Sierra from California. After cashing in substantial equity in their homes, they are relocating to the Silver State to begin new chapters in their lives.
“They read about what was happening in Northern Nevada, they came across a good business opportunity and ended up buying it,” Bottoset says.
While some older first-time business owners face the same business challenges as their peers, younger entrepreneurs continue to offset their lack of longtime business savvy with ample technical aptitude, Bottoset says. Oftentimes it’s easier for them to set up QuickBooks, automated vendor payments and other online aspects of running a business than it is for older business owners.
“The younger generations have a leg up,” Bottoset says. “They may not have the experience and skillset as the guy stepping out of the business, but they understand technology and how it can help them. They may not know the ins and outs of a particular business, but they’ve got technology on their side. The younger generations certainly have some skillsets that … positions them to be successful.”
Case in point: One of Liberty’s clients recently used a fax machine to send over some important business documents — and he had to resend three times because he kept feeding the blank side through the 1990s-era machine.
Financing, skilled labor and other issues
Financing for first-time business owners often brings about a host of issues to work through as well. Larson financed his purchase of the Frame Shop through Umpqua Bank, which helped him jump over quite a few hurdles to qualify for financing. Larson says learning the financials and other back-end aspects of the business have been challenging, but luckily his fiancé works as an accountant and controller for a regional company.
“This is drop in the well for her when it comes to numbers,” Larson says. “I am fortunate to have her in my wheelhouse — I wouldn’t have been able to do this without her or I would have had to incorporate other assistance.”
Finding skilled labor also has been an issue. Larson says framing is basically a lost trade in today’s digital world and he’s having a hard time finding replacements for the shop’s two lead framers, both of whom are at or nearing retirement.
“I’m in active pursuit of someone who likes this,” Larson says. “It’s not worth my time if I can’t find someone artsy and creative who is inspired by this kind of work. It’s nearly impossible — kids these days want to do digital this and that, and there are no (skilled) trades left.”
Despite the challenges and steep learning curve, Larson say’s he was dealt a royal flush when it came to purchasing his business.
“I was working in an elementary school as a custodian — that’s where I went from being a frame shop manager,” he said. “I cashed out my retirement and bought this business. I’ve been really, really blessed — things all fell into place for me here. A lot of things should have made (the purchase) come off the rails, but it didn’t. There was something greater than myself keeping it together; I truly believe that.”
Rob Sabo is a Reno-based freelance writer and former reporter for the Northern Nevada Business View.
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