Ames seen as positive place to start new businesses


Photo: Yue Wu/Iowa State Daily

Ben Petersen, sales associate and optician, works at Pearle Vision. Pearle Vision has been Ames for 27 years. Pearle Vision is a full service optical and service all eyeglasses and contact lens needs.

Micaela Cashman

In a place like Ames, you’re never the new kid in town for long.

Several new businesses have opened across the community in the last few months. LOF Express, Pearle Vision, Shari K’s Jewelry, Studio 7, Goals in Motion and Pappy’s Meeting House are just a few of the new names that have popped up.

“The fact that Ames is a university community full of highly educated and well-connected professionals who are actively engaged in new areas of research would suggest a high likelihood of people having good ideas for business ventures,” said Liesl Eathington, professor of economics. “University communities are frequently hot-beds of innovative activity, and [Iowa State] encourages that kind of innovation through its technology transfer programs and its research park, for example.”

Many businesses have closed their doors recently as well. Last week, Planet Sub closed. The week before, Taco Bell abruptly shut down its Lincoln Way location to the surprise of its employees and the public. During the summer, 21st Century Bowling, Fox 1 Lounge and Happy Joe’s all closed due to flood damage.

Eathington said becoming an entrepreneur is a great risk because so much can go wrong — things like low income, competition with larger corporations or natural disasters.

“People in a lot of academic disciplines have been trying to understand what makes business entrepreneurs take risks that many other people are unwilling to take,” she said. “Starting a new business is a very risky venture, even in a strong economy.”

Census Bureau research concluded that around 20 percent of new businesses do not survive their first year; half do not last five years.

“Even though the failure rates do increase during recessionary periods,” Eathington said, “a recession can also increase somebody’s motivation to start their own business — for example, if they have lost their regular job. Also, as some businesses fail, it can create opportunities for new businesses.”

Ames has proved to have a stable job market in comparison to many other communities. The labor market and economic research bureau of Iowa Workforce Development recently reported that Ames’ unemployment rate decreased from 4.1 percent in September to 3.9 percent in October. Iowa, overall, remained at 6.7 percent during those two months.

Many business owners cite Ames’ supportive environment as a reason they started their companies here.

Tim Read, owner of 5 Fingers Creative, 427 Douglas Ave., described Ames as an “outstanding community,” while Frank Jeffrey, founder of PowerFilm Solar, opened the engineering company in Ames because of the “strong pool of talent at Iowa State.”

Programs such as the ISU Small Business Development Center also encourage people to put their ideas in motion.

“Ames also has many resources to help people translate their ideas into business plans, whether they obtain assistance through the university or from the city’s strong business community,” Eathington said.