By PAUL WYCHE
The Journal Gazette
FORT WAYNE, Ind. (AP) _ Brian Hench isn’t sure if it’s youthful exuberance or ignorance.
“They say people who start their own business don’t fully know what they’re getting themselves into,” said Hench, who expects to break ground on a specialty grocery market this spring on Fort Wayne’s north side. “You have to have a certain level of risk tolerance and not everyone has that.”
According to EMSI, a division of CareerBuilder, the nation had an estimated 10 million self-employed positions as of 2013. That’s 5.5 percent of all reported jobs, but still down from a high of 6.2 percent in 2006, based on an analysis by the Community Research Institute at IPFW.
Self-employment exploded from 2001 to 2006, adding nearly 1.8 million jobs nationwide, so there was reason for optimism.
But the number of self-employed people in northeast Indiana has decreased more than 11 percent in Adams, Allen, DeKalb, Huntington, Kosciusko, Noble, Steuben, Wells and Whitley counties. That translates to 17,774 small-business owners in 2013, compared with 19,833 in 2006.
Ellen Cutter is director of the Community Research Institute. She studied EMSI’s report and concluded that entrepreneurship in the region was faring well before the economic downturn. There was hope the wage gap between those who work for others and the self-employed would shrink, Cutter told The Journal Gazette (http://bit.ly/1hSlvYK ).
In reality, workers at northeast Indiana companies have a median income of $17.37 an hour, compared with $13.78 for those who go it alone, EMSI reported. One explanation for the difference in pay is people trying to get their businesses off the ground tend to invest more in their companies and pay themselves lower salaries, said Joshua Wright, co-author of the report and an EMSI spokesman.
Interestingly, a recent global poll by Monster Worldwide Inc. of 3,585 people showed 51 percent expect to get salary raises this year – that includes 54 percent of U.S. workers who anticipate more in their wallets. A Monster representative said the survey was unscientific and didn’t provide a margin of error.
What those numbers mean for the self-employed is uncertain, but fewer people working for themselves isn’t a good statistic, Cutter said.
“What it means is the economy isn’t living up to its potential,” Cutter said. “A decline in entrepreneurs means lost opportunities. It limits the chances for another Sweetwater Sound or Vera Bradley to be created.”
Hench intends to forge ahead. The 35-year-old comes from good stock. His family owns the Chief Supermarkets chain in Defiance, Ohio. He held a management position at the company, but last year ventured off to start his own business.
A $2.5 million renovation of the former Union Chapel Church, 12628 Coldwater Road, will result in a 10,000-square-foot grocery that will specialize in fresh produce, meats and baked goods.
Hench knows it won’t be easy.
“You don’t start your own business to get rich quick,” said Hench, whose wife works from home as a banking analyst. The couple also are raising two toddlers. “We’ll have to watch our budget for the next few years because it takes a while for a business to get going.”
The sacrifice is temporary, Hench said, and the reward potential great.
“I could have worked for another company that is established,” he said. “I might have had a bigger salary in the beginning, but I’m only building equity for that company. This way, in the end, I’ll have something.”
Daniel Miller of Fort Wayne feels the same, but after at least a year of networking and job fairs, the unemployed 31-year-old is postponing dreams of owning his own company.
“It is a little disappointing,” Miller said, adding he is close to joining a technology company that is forming to serve the agriculture and energy sectors. He wanted to create a similar company after graduating with a master’s degree from the University of Saint Francis last year.
“I’ll still have creativity, and I still want to start my own business some day,” Miller said. “I’m not ruling it out.”
Between 2006 and 2013 self-employed jobs nationally fell by 942,000 and have yet to recover.
Wright said he does expect entrepreneurial opportunities to improve as the economy strengthens.
“We will see a bounce-back,” Wright said. “As the housing market gets stronger and other sectors do better, it will help those who are self-employed.”
Self-employed workers are those who, when surveyed by the U.S. Census Bureau, consider self-employment to be a significant part of their income or time working. Owners of incorporated business are not counted among the self-employed; neither are workers who freelance or have other smaller, secondary sources of income.
Cutter says the latter group holds out promise for more small-business owners in northeast Indiana.
“Since 2006, we’ve seen a 15 percent increase – 60,426 – in people having some kind of side employment in addition to their main job,” she said.
“That means the potential is there.”