These business successes were launched in tough times

The official unemployment rate today hovers around 10 percent -- far higher if you include those who've given up looking. Still, things have been worse. The U.S. unemployment rate in the Great Depression reached 25 percent in 1933 and remained above 15 percent through 1940.

No one in his right mind would have thought of starting up a business in a rocky, hardscrabble era like that. Or would he? Research business history from October 1929 to December 1940, and you'll find some astonishing, uplifting facts:

•Howard Johnson's was a single restaurant until 1932. Through franchising, it added 40 restaurants by the end of 1936 and had 107 units by 1939.

•Boeing created the first modern airliner, the 247, in 1933.

•Hormel introduced its canned chili in 1936 and Spam in 1937 while the Depression was in full swing.

•Curt Carlson founded the Carlson Cos. -- today a multibillion-dollar behemoth -- in 1938 with a $55 loan.

A downturn can spark great things. In 1975, at the end of another serious recession, Roger Schelper and his buddies decided to open what is today Davanni's, a New York-style pizzeria in Minneapolis-St. Paul.

Launching a business, especially in tough times, is a high-risk play that you should only consider with a cool head, a solid plan and the expectation that you'll have to devote incredible work and patience.

Here are some of the things Schelper learned in his venture that any budding entrepreneur should bear in mind:

•Research the market carefully. Your chances often hinge on identifying an attractive, unoccupied market niche that you have the know-how and raw ingredients to fill with authority.

•Know the success factors. In the restaurant business, for example, you could be the greatest chef since Julia Child and still end up eating your own leftovers. Running a successful restaurant has a three-course menu: location, location, location. Schelper's team zeroed in on high-density areas of customers with ideal buying traits, finding an optimum site with the right zoning. They were cooking with all the right ingredients.

•Be tightfisted about raises, especially with your own. Schelper clocked 80- to 90-hour workweeks from the get-go. He gave himself his first raise after the business retired a small loan. Get this: It was the first time the business paid him even minimum wage!

•Do something you love. "If you don't, you won't be able to put in the necessary hours to make the venture work," Schelper says.

Today, Davanni's has more than 20 pizza shops and a dedicated customer and employee base. But consider: Schelper was the kind of guy who was paying his way from the time he was 11, shoveling snow and mowing lawns throughout the neighborhood while he carried two paper routes. So before you make the leap and open that bed-and-breakfast or sink your savings into a digital widget factory, take a long, hard look at your track record. Do you have the makeup to take this kind of a pounding?

Mackay's Moral: Entrepreneurs who make it are usually born entrepreneurs.

Harvey Mackay is a Minneapolis businessman and author. Contact him at 612-378-6202 or send e-mail to harvey@mackay.com. His column is distributed by United Feature Syndicate.

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