LeBron James Helps Young Entrepreneurs In 'Cleveland Hustles'
KELLY MCEVERS, HOST:
Reality TV has followed celebrities into the wilderness and small business owners into a shark tank. A new show on CNBC follows young entrepreneurs in Cleveland. It's produced by basketball star LeBron James. The show is called "Cleveland Hustles," and the idea is to pair the entrepreneurs with established businesses in the city. From member station WCPN ideastream, Darrielle Snipes has more.
DARRIELLE SNIPES, BYLINE: Reality TV is real life for the four small businesses being targeted. They make everything from bagels to natural sodas to luxury purses. They're all going through significant growing pains while the cameras are rolling.
Like most startups, these face a number of basic challenges, like securing capital from a bank. On the show, successful business owners will act as both mentors and investors to try to take them to the next level.
PHILLIP WACHTER: We're young business owners. I mean I really think wisdom and experience that an adviser, investor could bring to your business - I think that is priceless. You know, if anything I mean that really helps you set, you know - helps you set up your business for success.
SNIPES: That's Phillip Wachter who, with his wife Jackie, own the company Fount which makes leather handbags. What was once their hobby became their business two years ago. At their studio in Cleveland's midtown, huge windows provide natural light as the hum of sewing machines serenades workers piecing together leather bags. In the beginning their plan was simple - use their savings and borrow money from family to make the bags.
JACKIE WACHTER: Well, and our business model for the first year especially was to put every penny we made from the business back into the business so that we can continue to grow.
SNIPES: They were able to buy several machines, including a huge clicker press to punch holes in the leather. They did have to get creative, working deals with distributors for Italian leather hides. The Wachters managed not to take out any loans or lines of credit from a bank. Phillip Wachter says they're trying to get credit now.
P. WACHTER: So it's kind of tricky. And especially being a smaller business, like, if we are trying to move quickly with kind of growth and to try to pursue different things, it's kind of hard to work on the timeline of the banks. But you know, you have to do what you have to do.
SNIPES: After a while, they actually turned a profit.
P. WACHTER: So we did at the end of the year make $2, which was really exciting.
SNIPES: They can laugh now that they've teamed up with Jonathan Sawyer. Sawyer is an award-winning chef and author who owns several restaurants here in Cleveland. They worked out a deal with Sawyer. He provides business advice over the next three years. In return, he gets 5 percent of Fount's gross sales.
That advice already seems to be paying off. Fount is now manufacturing 150 handmade bags a week, and sales are up. The Wachters opened a retail store in a Cleveland west side neighborhood. Jonathan Sawyer says investing in young entrepreneurs is often risky, but it's long been the bread and butter of the tech world.
JONATHAN SAWYER: I think that's amazing to think about - Clevelanders thinking about business in that, you know, Silicon, Napa, you know, different platform way.
SNIPES: Karen Mills agrees. She used to work for the Small Business Administration. Mills says the direct type of mentoring and funding is critical for creating jobs across the country.
KAREN MILLS: This is the American way and the American dream - having local sources of expertise and capital dedicated to making sure that those ideas get to the next stage. This could be a real boost to the American economy.
SNIPES: Back at the Fount studios, the Wachters are now managing 21 employees and aim to have twice as many in the next year. With their mentor's help and some hustle, they hope to be well on their way to making a profit that far exceeds the $2 they made in their first year. For NPR News, I'm Darrielle Snipes. Transcript provided by NPR, Copyright NPR.