Michael Panzner

How Some Small Businesses Are Coping

By Michael Panzner on | More Posts By | Author's Website

It’s no secret that small businesses have been especially hard hit by the financial crisis. But some are doing better than others. Based on a sampling of news reports from small and mid-sized newspapers around the country, here are some tips that might prove helpful:

Rethink product mixes and service locations

“Small Businesses Cope with ‘New Normal’” (Danbury News Times)

While the economic downturn has caused dozens of area small businesses to shutter their doors, many of the survivors have had to adapt to what many economists call “The New Normal” of consumers spending less and saving more.

His showroom recently underwent a complete makeover to carry less expensive housewares to adjust to the more penny- conscious spender, said Tony Aitoro, the owner of Aitoro Appliances located on Norwalk’s Westport Avenue since 1948.

“Our showroom was Subzero, Viking and Wolf,” he said. “Now it’s Electrolux and GE.”

On the bright side, the “New Normal” has apparently helped his business from a demand standpoint, Vetas said.

“Maybe folks are cutting back on the extra dinner out and substituting a night out at the coffee shop,” said Vetas, who recently moved his “community-oriented” shop from a 390-square-foot location at the corner of Post Road and Sanford Street to an 800-square-foot place on Unquowa Road to accommodate more customers. “In order to survive, it must be a place for everybody . . . all ages.”

Tap into the growing urge for bargains

“Time to Shop — But Watch the Clock to Get a Deal” (The Oregonian)

When the clock’s ticking, shoppers start clicking.

From big-box Target Corp. to tiny Web upstarts, retailers are winning over thousands of online shoppers by limiting when — and in some cases, who — can snap up daily specials offered at deep discounts. The trend has taken hold amid a recession, appealing to consumers’ hunger for a deal, even if they don’t have much time to mull it over.

Gilt.com, Ruelala.com and Beyondtherack.com are invite-only shopping sites that make cut-rate designer goods and travel deals available for a matter of hours or, at most, a few days. All launched relatively recently and now claim memberships in the millions.

Gilt Groupe of New York City, for instance, went live in late 2007 and now reports more than 2 million members and expects sales of as much as $500 million this year.

Another site, Groupon.com, offers discounts of half-off or more for retailers, restaurants or services, such as massages or manicures. To trigger deals, a minimum number of people must buy the coupons. The company founded two years ago in Chicago opened a Portland-geared site last October. Since then, Groupon reports, it has collected 57,000 local members and distributed more than 32,000 coupons.

“A kind of frenzy thing happens,” said Tobias Hogan, co-owner of Eat: An Oyster Bar, which was featured recently on Groupon with a deal offering $25 worth of seafood for $12.

Target customers and markets that are (still) growing

“Hong Kong a Hot Market for Calif. Wines” (Fresno Bee)

A drop in tariffs and a growing interest in California varietals is making Hong Kong one of the fastest-growing markets for U.S. winemakers.

Hong Kong’s imports of U.S wine — most of which come from California — soared 41% in 2009 over the previous year to $517 million.

The boost helped makers of high-end California wine, whose overall sales have slipped during the recession. Also benefitting are the makers of value wines.

San Joaquin Valley farmers — long known as the workhorses of the grape industry — produced the largest amount of grapes crushed in the state last year. And much of the tonnage is used for lower-priced wines.

A Hong Kong trade official said the consumption of California wine in his country is growing at all price levels.

“We are talking about the full range of wines, from bottles as low as $12 to those that are easily $40 to $50 dollars,” said Donald Tong, Hong Kong’s commissioner for economic trade affairs.

“Asia’s economy is rebounding faster than ours, and we have an excess of high-end wines, so there is a real effort to make these luxury wines available to China, Hong Kong and other Asian countries,” said Steve Fredricks, manager partner of Turrentine Brokerage.

Gladys Horiuchi, spokeswoman for the Wine Institute, agreed that Hong Kong represents a growth market for California wine exports.

“It is one of the bright spots in this global recession,” Horiuchi said.

Help other businesses improve their bottom lines

“Local Woman Wins National Award for Entrepreneurs” (Charlotte Observer)

In middle of recession, Sarah Stevens expanded her data security firm – and thrived.

Sarah Stevens set a $1 million benchmark for her business at the height of the worst financial crisis in decades. Just before her mother died of cancer in November 2008, she’d told her to “go for it, just go for it,” and Stevens did.

She stumbled across a contest online for female entrepreneurs and signed up, tracking her company’s results with 1,500 other business owners on the competition’s Web site. She more than doubled her revenues and profits last year, and hired nine highly paid workers.

And this month, Stevens Technologies Inc., which protects business and government agencies’ data from Internet hackers, cyber attacks and other threats, won $100,000.

“I remember every word of that call, because it was so exciting,” said Stevens, 32, who lives in Mint Hill. “I try not to be too girly and scream, but I did. I laughed and cried at the same time.”

The yearlong competition was part of the Make Mine a Million $ Business program, a joint effort of American Express’ small-business division and a nonprofit that supports women entrepreneurs.

Stevens plans to use the money to train, retain and hire employees — and by the end of the year, top $4.5 million in revenues.

“That injection helped so much,” she said.

Stevens’ Internet security work began in the late 1990s, when major companies such as John Deere recruited her out of college in Colorado to protect their sensitive information.

She incorporated the company in 2002, hired employees and landed a major government job, protecting the U.S. Antarctic Program from Romanian hackers, she said. Two years later, Stevens moved the company to Charlotte after securing a large contract with an East Coast energy company.

Now, Stevens Technologies works with government agencies and large businesses around the country, including a local energy company and financial institutions, Stevens said.

Her plan to reach $1 million came at a challenging time. The economy was slumping, and credit dried up for many small businesses. But Stevens Technologies understood its clients and found them ways to save money on things such as compliance spending, she said.

“What happens is, during a tight economy, definitely businesses start looking at their budgets and tightening their belts quite a bit,” Stevens said. “But they see the true value in what we do.”

Rethink purchasing arrangements and sales terms

“Business ‘Survivors’ Expressing Optimism” (Florida Today)

Jessica Ziarno of Melbourne owns Tony’s Total Hair Salon in Melbourne, a business that evolved from the barbershop her grandfather opened in 1961 after he immigrated here from Spain.

He went through some tough times but managed a successful business that he passed on to his son, who also experienced numerous economic ebbs and flows.

Now it’s Ziarno’s turn to experience a significant downturn and she said she has learned unique lessons as a business owner, and as a student at what some people call the “University of Recession.” And, through it all, she emerged optimistic.

“Any dream worth having is worth the struggle,” Ziarno said. “Success takes time, determination and commitment.”

Ziarno, who took over the business from her father 10 years ago, recently moved to a new location on Palmetto Avenue with cheaper rent.. She also started ordering products every other week — and in larger amounts — instead of weekly, to reduce shipping costs. Finally, she began accepting credit cards, which she had not done before.

“Luckily, however, I am slightly immune to the downturn, since hair never stops growing,” Ziarno said. ” I did see a slowdown about three to four years ago, shortly after the real estate market dropped. But this last year has been quite busy for me.”

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