Is your small business down?

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I've been noticing a trend, a silent one because people are too embarrassed or scared to talk about it: small businesses are really doing badly. The customers are just not walking in the door like they did a few years ago. Yet we are supposed to be in boom times. I thought it was just my business, that I wasn't putting the energy into it since i moved to the country, but it is not just my business, it is all kinds of other small retailers and their suppliers. The media tell us how great it all is, how much money software people and dot.coms are raking in, but I cannot figure out where the people are. Some fall-off must be fall-out from the steamrolling preponderance of franchises and big chains, but that would not account for my problems. Where are the customers? for my place, for the guy across the street, for the small businesses all over? My question for you folks is, if you own a small business, whether retail or service or whatever, is your business unusually down this year? Or is it just me?

-- snoozy (allen@oz.net), August 01, 2000

Answers

Snoozy:

Running a small business is tough. I'm not sure the percentage is right, but something like 90% of small businesses don't last five years, many not even a year. The saying, "The economy is booming" is a very broad usage. Even with a booming economy there there are still pockets of poverty, low wages or just a sluggish local economy.

Try calling the Small Business Administration in the nearest large city and inquire about help from SCOPE. Basically it is retired business people who volunteer to help out small businesses with their expertise. You might have to pay some travel expenses.

I'll use Waverly, TN as an example. The storefronts in the old downtown section around the courthouse are mostly staying full, but there is always turnover among them. Oriental restaurant opened about a year ago. At first is was packed. Now when I go in for take- out, maybe there are two diners there. As business has slacked, they have cut back on the more expensive ingredients, so it impacts future business. Don't expect them to last much longer. Two different places tried antique malls. One twice in a row. All three failed. Local people don't buy much, and we just don't get the tourist through to support something like that. T-shirt business went out of business. I mean, how many hand-crafted T-shirts does one need? For me, not one. Latest attempt in the place which use to be an antique mall is a semi-fancy restaurant. I give it about as much chance as the oriental place for a long stay. Even if it will be the only 'white tablecloth' restaurant in the area, how much support will they have from regulars. The entire population of this country is only about 16,500 people.

From what I'm told downtown Waverly thrived until Wal-Mart came in. After that it pretty well died. Slight come-back, but still not much with any permanence.

-- Ken S. (scharabo@aol.com), August 01, 2000.


Hi-Snoozy this is Sonda in Ks. I have owned my own businesses for over 35 years. In the last 3 or 4 years now I have had antiques, collectables, & gifts, etc. in over 44 friends small businesses-- located all over Ks. & Mo. this last year 27 went out of business!!!! All the others are hanging in there, by the skin of their teeth! I have several other friends that own businesses & all are haveing a BAD YEAR! THESE ARE PEOPLE WHO HAVE OWNED THIS SAME BUSINESS FROM 1 YR. UP TO 27 YEARS! It really makes me wonder also! I have friends that sell & also sell for me/ on the internet & those sales are way down also. Three friends that have owned antique malls for many years closed this year, all in different areas of Ks. I don't know. I think it is slower all over for the small businessman. Sonda in Ks.

-- Sonda (sgbruce@birch.net), August 01, 2000.

I mine were a new business or concept in a dubious or depressed pocket, I would assume it was just new business syndrome, but mine is a well-established business (over ten years) in a excellent area of one of the "boomingest" cities in the country --Seattle. We are in almost every guidebook on Seattle, etc... The other business owners to whom I have spoken are in other good retail areas. One of our customers is a pediatrician who said that for the first time in his career, he has had to dip into his personal savings to cover operating (I mean office!) expenses. Ken, many years ago when I started my first business, which was a travel agency specializing in Asia, I went to talk to SCORE people, and they weren't all that helpful, though they were well-meaning.

-- snoozy (allen@oz.net), August 01, 2000.

ours is doing well...knock on wood. we do things folks donot want to do themselves but like the outcome. we do heavey landscaping,patios walks and complete landscapes. its hard work and alot ofpeople wont do it. we are also in a high growth area yuk! between d.c. and new york,alot of 300 thousand $ homes going up.i think labor type work is holding its own.

-- renee oneill (oneillsr@home.com), August 01, 2000.

I don't own a business, but I notice that when I go into the grocery store people don't seem to have as much in the carts and what they do have is the sale items--just like me. Also the dollar stores seem busier than last year, and all the stores don't seem to have as much cash in the drawers. Maybe most folks pay by credit card or check now. I don't know. I do notice that a lot of businesses seem to be lowering prices. Not having sales anymore, just lowering prices. Also, most of the sales at Walmart recently seemed to be groceries.

-- Green (ratdogs10@yahoo.com), August 01, 2000.


My service business is doing very well, actually increased income. Unemployment hasn't changed much here, and new $ hasn't moved into this rural area any more than years before. Just raised my prices, first time in 7 years, so I'll know more about the effects in September.

-- Anne (HT@HM.com), August 02, 2000.

We are brainwashed that things are good, really good. But take a look at the things you buy. Who is making them. Very poor people. Maybe making $50 to $100 per month. We are living of the fat of Asia and the countries south of here. Here, its the dealers makeing a profit by pass ing the work of these poorer people into the hands of the consumer. But as we all know the real wealth comes from the making of something, or harvesting of ore, crops or timber. I see too many middlemen for this ballon to grow much bigger. The factorys are going, goverment makes it hard to mine or log and farmers work for goverment handouts. So where is the real wealth?? Now that things are geared toward service industry I beleive a small downturn in the economy will have the possibility to snowball fast. That's why I think it is so important for folks to be in a position to care for there own needs as much as possible. The people of this forum seem well prepared. I enjoy good times but stand ready for the future, if it shall not be so rosey. Don

-- Don (dairyagri@yahoo.com), August 02, 2000.

We had a book and music store for three years in the early 1990's and Wal-Mart kind of blew us away (plus some other factors). Now my husband operates a home-based repair service and I continue my 20 plus years as a newspaper reporter based at our home.

I think the secret is having as much diversity as possible. If you're a bookstore, sell many types of books and all kinds of things book readers like; if you sell flowers sell plants, stationery and tee-shirts plant lovers would like, videos on raising plants, etc;

We try now to have our income coming in from more than one area so we won't get in a hole if one thing is not doing well at any particular time! best wishes

-- Suzy in 'Bama (slgt@yahoo.com), August 05, 2000.


My wife and I run a flea market setup on the side and Wal Mart and Dollartree have hit us hard. Guess its time to find a "better running horse" or homestead completly. I'm inclined to look at homesteading

-- Jay Blair (jayblair678@yahoo.com), August 06, 2000.

My suspicions on this one is the old credit card dilemma. I think the vast majority of consumers are in over their heads and have finally run out of cards to use. I think the high debt ratio that so many have is just destroying them and there is no way out.

My brother has just come out of the hospital and so far has $38k in hospital costs. As if that wasn't bad enough, being hospitalized prevented him from working, he is self-employed, which means he cannot make good on his credit card debt which already was atrocious. He says one of them was charging him 38% interest because he was falling behind on the other ones and even though he kept up with this one they read the other reports and upped his rates. He is going to declare bankruptcy.

We, on this list, all know how important it is to avoid high debt and he is a perfect example of what can happen. He did not have a good income for having credit cards but they enticed him with sending them in the mail and he got way over his head, borrowing from one to pay another. He mentioned that one is over $7k. He didn't say how much the others were or how many.

But, he is not alone. Not by a long shot. There are millions of people just like him out there. Rich and poor. Even the upper middle class is borrowing way over their heads. I think it is becoming time to pay the piper.

I admit I had three cards five years ago that got the better of me and I have a good job. But I realized it soon enough before my credit was impacted to go out and get a signature loan and pay them all off. Then I tore up the cards and have never gotten another one even though they come in the hundreds in the mail over the course of a year.

The upper middle class are borrowing to ride the stock market and any major dip in that is going to cause some heavy crying. Debt is way out of hand in this country and the bottom is going to fall out soon if it hasn't already. I suspect you are seeing the true beginning.

-- Colleen (pyramidgreatdanes@erols.com), August 06, 2000.



Around here, folks are kind of on hold as far as spending goes. For one thing, Microsoft employees (who drive our local economy) are looking at their stock option portfolios and noticing that they have declined in value by quite a lot! They are slowing down their spending. Also, we have legislation completed/pending that restricts development, etc., in salmon sensitive areas. That, combined with Microsoft's situation, has started slowing down the real estate economy. Also, with the national election looming, investors may hedge a bit since it doesn't seem obvious which party is going to win yet. I guess the multiplier effect kicks in, and the economy slows...the stock markets sure aren't behaving dynamically at any rate. I don't think we'll see anything major until after January, if even then. Who knows?

I for one am not buying a lot of commodities, since I am still going through the huge amount that I stockpiled for y2k..maybe start buying rice or wheat again in about oh, 2010.... :)

-- sheepish (rborgo@gte.net), August 08, 2000.


While folks are making quite a bit of money, much of the new money is tied up and non-negotioable. People are living large in good times yet are cash poor. Credit card debt is at a all time high. Bankrupsy is up. People trying to keep up with the jones dont have any money to spend.

Could also be that times are good and there is a lot of competition in the small business area. I also bet e-commerce is eating into some of your small business money. I know a local flea market manager says he has less people selling now and less people buying because of the like of ebay and other online sources. I buy stuff all the time at autions for little to know money and resale 10-20x what i purchased it for. I average about 20x profit on an item and have had a much as 450X my purchase price on an ebay sale.

-- Gary (gws@redbird.net), August 08, 2000.


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