Startup hopes to buck trend

Moving service gets rolling as entrepreneurship tails off

Workers with J&B Movers (from left) Haden Hawkins, Lukas Burrow and Michael Post move a client’s belongings Thursday at a storage facility in Maumelle. The startup, started by a college student, employs mostly students.
Workers with J&B Movers (from left) Haden Hawkins, Lukas Burrow and Michael Post move a client’s belongings Thursday at a storage facility in Maumelle. The startup, started by a college student, employs mostly students.

Brett Long has his own business with an office stacked with cardboard boxes behind a gas station and a parking lot in Conway.

"When we started, we were just hoping for money to blow on the weekend," he said. "I had a truck and trailer and decided to move people. I decided it can't be that hard."

Long, a business student, started J&B Movers his freshman year at the University of Central Arkansas with his roommate. Now he is expanding to Jonesboro, entrusting the new location to childhood friend Cale Reddmann, a senior studying agriculture technology at Arkansas State University.

Long and Reddmann grew up together in Harrisburg -- a "half of a one-horse town," Long said -- about 20 miles south of Jonesboro.

"We've been best friends all our lives," Reddmann said. "We grew up together, our families grew up together."

Long and Reddmann are entering a declining startup environment in the state.

In the past five years, the rate of new entrepreneurs in the state has steadily declined, according to a report by the Kauffman Foundation, a nonprofit that studies entrepreneurship. Last year, only about 25 of every 10,000 adults in Arkansas became entrepreneurs each month.

The state ranked 32nd in startup activity this year, according to the study.

Carol Reeves, associate vice provost for entrepreneurship at the University of Arkansas at Fayetteville, said most new job growth in the economy is from startups.

But if startups aren't starting up, those jobs aren't being created.

Long and Reddmann's classmates who graduated in 2015 are entering the best job market in years, but for new graduates, unemployment and underemployment rates remain high.

Unemployment for young college graduates is down to 7.2 percent, according to a recent study by the left-leaning Economic Policy Institute. The underemployment rate, the rate of recent graduates who have recently given up looking for work, or can find only part-time work , is 14.9 percent according to the study.

Those numbers are lower than during the recession, but still well above pre-recession norms.

While his classmates hunt for elusive careers at corporations in Little Rock or on Wall Street after graduation, Long already has a gig that pays a starting salary. Last month, Long made about $2,800 through J&B Movers, in addition to being a full-time student.

"When we're out of school we can see how far we can take it," he said. "If it works, it works, and if not, well, that's what we went to school for."

And most new businesses won't make it, Reeves said.

"There aren't many Steve Jobses," she said. "You take a really big salary cut at first. If things go well, the reward is there."

In a weak economy, one of the biggest hurdles startups face is raising enough money.

"If investors don't have the money, then entrepreneurs can't get the startup capital," Reeves said.

Reeves said she doesn't advise undergraduate students to start their own companies because it's difficult to find investors for businesses with inexperienced people at the helm. And it's easier for recent graduates to make money quickly if they take the traditional route and work for a corporation.

"Financially, at least in the short term, they would be much better off going to corporate," she said. "I just don't think money is going to motivate people ... to go through what they have to do to get this business off the ground."

But Long didn't have to worry about finding investors for J&B Movers. Unlike costly tech startups, Long said it took only enough money to rent U-Haul vehicles for a few jobs before he could afford to buy equipment and pay insurance.

And J&B Movers has an easy, cheap labor source -- other students.

"I have an unlimited supply of people I can have working for me," he said. "I can always find someone."

Long said the company moves mostly middle-aged and older people, not college students, in the Conway and Jonesboro areas.

"Everyone that's our age to 30s, they've got all their buddies they can pay with beer," he said.

Long and Reddmann said they will try to continue the moving company after graduation.

"It's not like a 9-to-5 job," he said. "When you go in, you have no idea what to expect."

SundayMonday Business on 06/15/2015

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