Oil and gas downturn leads to small business start-ups

Christian Brothers Automotive owner Steve Williams opened the franchise in Katy after leaving the oil and gas industry in 2014.

Christian Brothers Automotive owner Steve Williams opened the franchise in Katy after leaving the oil and gas industry in 2014.

After experiencing success in the corporate world and 10 years commuting along Houston freeways, Katy residents Lance and Jessica Mayo opted for a career change—opening a franchise called Growler USA America’s Microbrew Pub in Katy in July.


KTY-2016-07-40-2“We’re both entrepreneur-type people. We both know how hard we can work,” Lance Mayo said. “We knew what was needed out here. We found [a business model] that would fit in a suburban-oriented atmosphere.”


The Mayos are two of thousands of Greater Houston area residents, including many in the Katy area, starting their own businesses, said Tim Jeffcoat, Houston district director for the U.S. Small Business Administration.



Joseph Decker, director of the Fort Bend County Small Business Development Center based in Katy, said layoffs of thousands of employees from oil and gas companies and firms that support the industry have led many energy workers to start their own businesses.


“Many of those former employees have excellent [retirement plans] and other savings plans which they in turn utilize to begin a new business,” Decker said. “Most are educated and are highly specialized in areas requiring skills that can be redirected to starting and growing their own businesses.”


Decker said in addition to their good incomes, former oil and gas workers often have good credit scores, which helps secure necessary additional capital they need to fund their startup.


“Many are still in their 40s, 50s, and 60s and have the need, the energy and perseverance to make it happen,” he said. “They’re professionals and committed to continue to provide for themselves, their families, and ultimately, the economy.”


Jeffcoat said population increases in the region have caused a demand for services. Combined with the pro-business atmosphere in the Greater Houston area it is a good time to open a new small business, he said.


“If it is the right business that meets a market need, I don’t know if there is a bad time [to open a business]. The only exception is a full-scale recession like in 2007-08,” Jeffcoat said. “Houston is a vibrant market filled with consumers everywhere.”


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Lance LaCour, CEO and president of the Katy Area Economic Development Council,  said the oil and gas downturn has led many former workers to start their own businesses.


“[This] happened back in the 1980s,” LaCour said. “When you have a situation like this, a greater number of small businesses open.”



Local resources


Decker said the Greater Houston area, including Katy, is a prime area for people—U.S. citizens as well as immigrants—to start a new business.


“Waves of people are trying to start small businesses. Houston is an international city and it is pro-business at all levels,” Decker said. “Average people are doing this. We have all ages, all races, all backgrounds. There is no pattern. It’s the American public.”


Oil and gas downturn leads to small business start-upsA nonprofit organization funded by the federal government and the state, the SBDC helps people start small businesses by providing information, resources and connecting them to other specialists, Decker said.


He said the process for people starting their own business begins with the initial decision to leave a job, and then opting to launch an independent business or a franchise.


Since 2002, officials with the Fort Bend SBDC—which has 17 offices—have helped small-business owners acquire more than $163 million in loans, Decker said.


The types of businesses people are starting range from office cleaning services to gun stores, Decker said.


“[Katy] is exploding toward the positive [for small-business owners],” he said. “Katy is well-diversified, and the growing population is looking for services. There is a growing market population that needs services.”



Investing in Katy


In addition to the Mayos, scores of other entrepreneurs in the Katy area have started their own businesses in recent years.


Steve Williams, a longtime executive with oil and gas giant BP, said he left the industry in 2014 to start his own business in Katy. He now owns Christian Brothers Automotive on FM 1463.


KTY-2016-07-40-4“I really wanted to shrink my world,” Williams said. “I was working for BP; I was an executive for 20 years. I wasn’t really ready to retire. I wanted to stay active.”


Williams said he investigated other options before settling on Christian Brothers Automotive.


The process was a two-way street, he said, noting he researched the franchise as much as the parent company vetted him. Being able to live in Katy and be a part of the community was an important factor in deciding to open his own business, Williams said.


“I smile every day. I don’t get on [I-10] unless I have to do something,” he said. “One of the biggest things for me was contributing to the local community and to local schools.”


Mayo said having a business close to home is beneficial, and his wife Jessica will continue to work her day job while he operates the restaurant.


The couple has invested about $650,000 in the business, located on FM 1463. The couple paid about 45 percent of the cost themselves and obtained an SBA loan to fund the remainder of the cost of opening the eatery, Mayo said.


“We thought there was a need for craft beer in Katy,” he said. “We’re making a big gamble. We’ll roll the ball and take a chance.”


Taha Mohamed, who owns Firehouse Subs in Katy, said he started his franchise in 2014 after working for 30 years in both the restaurant and hotel industries. Wishing he had made the decision to open a franchise earlier, Mohamed said the business is a family affair, noting his three sons work at the business. [totalpoll id="164960"]


“I did this for my boys, to have a company for them,” he said. “I’m showing them how to be successful in business instead of just giving them the money.”


Edward and Carolyn Martinez also opted to open a Katy franchise—a joint TCBY Frozen Yogurt/Mrs. Fields Cookies—after Edward was laid off from his job in the oil and gas industry this year for the third time, Carolyn Martinez said.


“[The layoff] was even more of a reason [to start a franchise],” Martinez said. “We said, ‘Let’s get you out of this business.’”


The franchise opened in June, and Martinez said the business has become a family affair. Both Carolyn and Edward work at the location in addition to their two teenage daughters.


“It’s a new beginning. It was scary at first, [we thought] ‘How are we going to afford this?’” Martinez said. “We really want to make this work.”


Oil and gas downturn leads to small business start-ups



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