It was 2009, Delaware’s jobless rate was pushing nine percent, and Michael Kelczewski was tired of the grind. After being laid off and piecing together odd jobs, he was on the verge of moving to Costa Rica to sell swimwear.
First, though, a Hail Mary. He decided to resurrect the entrepreneurial skills he hadn’t used since he was a teenager, when he started a digital marketing company with a friend. This time around, though, he’d give real estate a shot.
Kelczewski, of Wilmington, read up on the industry and edged into selling houses part time. His gambit paid off—he sold a dozen houses in his first year. In the end, he was thankful that a lousy job market pushed him to create his own path.
“The thing is, there never really is job security,” Kelczewski says. “Nothing is certain—you either grab the bull by the horns and persevere, or you kinda just falter.”
Whether becoming freelancers or franchisees, contractors or entrepreneurs, Delawareans are increasingly seeking out opportunities outside of more traditional careers. Some are retired with part-time gigs; others work full-time jobs while pursuing side hustles. Others strike out on their own full time.
“It’s scary but thrilling at the same time,” says Diane Thornberg, a formerly retired Lewes resident who opened Escape Rehoboth with her husband, Clint, three years ago. “You couldn’t [have told] me, post-50, that these are the kinds of things I’d be doing.”
The advent of ride-hailing apps like Uber and Lyft in recent years has allowed many individuals to create flexible work schedules.
Driver Rei Hiroki of Newark started driving for Uber and Lyft about 18 months ago. She’d recently purchased a new car and wanted to make the investment work for her. Within two weeks, she was making more money in one weekend of driving than she made in an entire week at her regular job. “When I realized it wasn’t a fluke, I cut back on the other job,” she says.
A night owl who generally works past the witching hour, Hiroki focuses on the University of Delaware campus on Thursday and Friday evenings, and Philadelphia on the weekends. “I’m my own boss, basically,” she says. “It makes me happy; it works with my life.”
Increasingly, Americans aren’t searching for a job; they’re searching for work. According to a Gallup poll, roughly a third of Americans are part of the gig economy, working on a freelance or contract basis. A 2017 study from Intuit, a business and financial software company, says this “on-demand” workforce has grown from 17 percent of workers a few decades ago to 36 percent today, and will reach an estimated 43 percent by 2020.
Delaware may be the country’s second-smallest state, but its residents are continuously finding new and unique opportunities.
In 2007, Heather Love and her husband opened Whereabouts Cafe in Newark as a way to help finance her healthcare costs. They figured they’d just hire a manager and enjoy the mostly passive income.
Then the recession hit.
“It was not the smartest time to buy a restaurant, especially with zero restaurant experience,” Love says.
The early years required punishing work—and the venture Love had hoped would help pay for her healthcare for a time ended up making her health issues worse.
But the hard work paid off. More than a decade later, the cafe is not only still open, but also planning an expansion from 49 to 160 seats. Love credits her success to a philosophy once articulated by Scott McNealy, a co-founder of the computer technology company Sun Microsystems: Too much focus on making exactly the right decision can lead to paralysis. Whatever you choose, put in the work to ensure that you made the right choice.
Drew Smith of Media, Pennsylvania, bought his first Five Guys franchise after sampling the burgers in Washington, D.C. He now owns 23 Five Guys locations and franchised a new chain, Melt Shop, which opened in Christiana Mall in November.//photo by Leslie Barbaro
One way to remove some of the risk from starting a restaurant or other business can be to franchise an established brand.
Back in 2005, Drew Smith began frequenting one of the few Washington, D.C., locations of a then little-known burger joint called Five Guys. Smith loved the burgers so much that he repeatedly asked if the company was interested in franchising.
“No” turned into “maybe,” which eventually turned into “yes”—and Smith, who lives in Media, Pennsylvania, now owns 23 Five Guys locations, largely in the Philadelphia area. He recently franchised a new chain, Melt Shop—a comfort food-focused sandwich eatery—opening the first Delaware location at the Christiana Mall in November.
Franchising offers entrepreneurs a range of opportunities, both in terms of investment size and work commitment. At the high end, starting a McDonald’s costs between $1 million and $2.2 million, according to the company.
“Buying a McDonald’s is a pretty sure way to make some money,” Smith says. But for new franchisees, a more realistic option might be a company like Subway, which estimates the total investment required to start a store to be between $116,000 and $263,000.
Starting a smaller franchise can make the math more complicated, though. Say your store’s annual income is $422,000—the average annual sales figure of a Subway store, according to an industry magazine. If you do well and keep 10 percent, Smith says, that’s about $40,000 in profit—which isn’t much considering your investment and labor, so you’d probably want to consider operating multiple stores.
One way to finance a franchise investment is through a Small Business Administration loan, which typically offers a lower interest rate than the private market. But the tradeoff is time, Smith says; the loan will likely take months to secure.
The best franchisees tend to be people who have a lot of experience with the nitty-gritty details of running a restaurant, says Josh Morgan, chief operating officer of Melt Shop.
“The business is competitive,” he says. “It’s very difficult and requires a lot of oversight and accountability. We’re making product every minute, every hour.”
Morgan also recommends that people have a genuine affinity for—and an alignment of values with—the brand they choose to franchise. “It’s like marriage, in a way,” he says. “You have to make sure you have the right partner to get through any ups and downs you might have.”
Mac Nagaswami turned his idea into a successful business.
In 2012, before he became a renowned success story throughout the state, Mac Nagaswami was a University of Delaware junior with an observation.
He noticed cars wrapped in advertisements for the energy drink maker Red Bull, and wondered why such a tactic wasn’t more common. He decided to see for himself if other companies and drivers would be interested in replicating it.
“I’m not getting caught in analysis paralysis,” he remembers thinking. “I’m going to try it and see what happens,”
He started on a relatively small scale, making a simple website and seeking drivers via flyers. He didn’t heed advice that most drivers wouldn’t consent to having their cars tracked by the advertisers. “In the beginning, you take a lot of advice with a grain of salt,” he says.
As it turned out, interest in the business model proved high, and Nagaswami soon officially launched Carvertise. Thousands of participating drivers have since wrapped their cars in ads—and currently tend to earn at least $100 a month doing so.
Instead of quitting their current job or immediately going all-in on new opportunities, many people prefer to pursue career transitions gradually.
Nagaswami’s advice: “Don’t bet the farm at the beginning. Slowly wade into the water and see how things are going.”
When John Himics started dabbling in digital marketing, he was a manufacturing engineer at DuPont. He remained there full time while he founded First Ascent Design in early 2015.
“It took a very long ramp to build this into something that makes recurring monthly revenue,” he says. There were no angel investors, no dreams of becoming the next tech phenom. He even hired other staff members before he could pay himself a full-time salary. He finally transitioned to First Ascent full time this past March.
“I joke that I built a business the not-sexy way,” says Himics, who is also an adjunct marketing professor at the University of Delaware’s Horn Entrepreneurship Program.
Specific skill sets can be profitable and the internet reduces barriers, making potential customers easy to find.
The internet continues to reduce barriers between providers of niche services and their customers.
When she posted a listing on Craigslist advertising her snuggling services, Genesis Willis of Smyrna didn’t expect much of a response. But within an hour she already had one response—and soon after, three customers booked for the following week.
Willis first worked as a paid snuggler in Las Vegas through a website that received a major cut of her earnings. Now, on her own, she charges $120 for a two-hour session. Many of her customers, she says, are men who are lonely and looking for companionship, conversation and, of course, cuddles.
“I get to choose if I want to do it,” she says of accepting potential clients. “At the end of the day, I’m in control. If I’m uncomfortable, I walk out.”
If you’ve got a specific skill, there are probably people willing to pay you for it—especially if it can simplify their life.
Take, for example, Jim Mealey, a Marine Corps veteran who lives in Middletown and has started offering to come to people’s homes to teach them self-defense skills.
“I think the days of people going to the gym are going by the wayside,” he says—partly because he thinks people are more comfortable in their own homes and/or have less time to drive elsewhere.
Though he’s already received more than a dozen inquiries about it, Mealey says his business is still more of an experiment at this point.
“It’s an idea I’m putting out there to test,” he says. “I’m not going to live or die by it.”
When you apply for a traditional job, you send in your resume. You do some networking. You interview. It’s not easy, but at least there’s a blueprint.
When it comes to venturing off on your own, however, there’s not necessarily a well-trodden path.
Smith, the Five Guys franchisee, says aspiring franchise owners should know (or learn) how to speak the language of business. You need to understand, for example, whether the financial assumptions underlying a deal are realistic or overly rosy.
“If you don’t know accounting, you’re going to be taken advantage of,” he says.
He and others suggest looking inward to determine if you’re willing to sacrifice the predictability of more traditional jobs for minimal rewards—at least at first.
As Love, the Whereabouts Cafe owner, puts it: Do a “brutally honest self-inventory.” Those going into the restaurant business can expect to work up to 80 hours a week, so someone looking to start one needs to be prepared, she adds.
For Nagaswami of Carvertise, though, the potential reward of cutting your own path is worth it.
“If you’re passionate and you believe in it, give it a try,” he says.