Survival successGreat Recession hindered but also helped some small-business owners
A debilitating recession would seem to spell out certain death for small businesses across the midstate.
Yet for some, the Great Recession proved to be a driving force behind surviving until today, owners said.
The down economy of 2007 through 2009 and the sluggish recovery since certainly stalled plans of small-business owners, they said. However, in many ways it forced them to work even harder, learn to be fiscally conservative and stretch their skills to make their companies successful, they said.
For some business owners, launching a new operation at the time was a matter of being ready.
At Lady Linden Bed and Breakfast in York, husband and wife Jean and Jim Leaman put about $500,000 into renovations over almost four years, and in 2009 they were ready to get the show on the road, Jean Leaman said.
For Krisha Martzall Photography in Lancaster, owner Martzall said she’d been working about six years for several other photography businesses and felt she had the experience to start her own business in 2007.
Primp Agency in York began because owner Sha’ Summerlin couldn’t afford to go back to work on a salon salary after her second child was born in 2009, she said. She combined her experience as a singer and cosmetologist to create a booking agency for hair stylists, makeup and wardrobe artists.
“I had to step out and make it happen,” she said. “The recession forced me to not take no for an answer, to go above and beyond and do whatever I had to do.”
The economic climate led her to be more flexible, said Ann Dennison, owner of Advanced Physical Therapy and Fitness in Mechanicsburg.
As the economy began to crumble, her clients saw copayments increase dramatically and many stopped coming in as frequently, or at all, she said.
“A lot of people think that health care is sort of recession-proof; I don’t think that’s the case,” Dennison said.
Her company worked with doctors and patients to set up payment plans, held off on equipment purchases and tried to balance between still collecting payments insurance companies require while assisting customers, she said.
The economy also proved challenging for Walnut Grove Therapeutic Equestrian Center Inc. in Dover Township, York County.
The nonprofit was approved for its 501(c)(3) status with the Internal Revenue Service in January 2009. President Renee Poff and her husband were able to purchase a sizeable farm to transform into a therapy riding center and plans were moving forward to begin offering services.
However, the economy stalled the organization’s ability to raise the $400,000 needed to make changes, including a climate-controlled indoor arena, handicapped-accessible areas, paved parking and other projects to make the facilities suitable for those with disabilities, she said.
Walnut Grove this summer hopes to begin some of the smaller projects to get things moving as the funds are raised, Poff said.
Other businesses also are beginning to work on ideas they thought they would be tackling years ago.
Some plans are being worked on today that were slated for back in 2009, when Carney Engineering Group Inc. in York started, said co-owner and President Josh Carney.
He and his partners had a couple of projects in the pipeline and decided to set off with their plans, he said.
Much of their work almost immediately dried up, though, Carney said.
“If I use 2008 as a reference, we saw workloads drop to probably 30 percent of what they were previously, and we figured (there was) a 60 percent reduction of what was available on the market,” he said.
The company had hired several people but had to trim its staff down to three, he said. Those who remained chose the option to cut their hours to 30 per week, as one of several presented by the owners to keep the business going.
Today, Carney Engineering is at 10 full-time and two part-time employees, he said.
With the slow workload during the recession, the company got its feet under it without being overloaded and solved many of the operational kinks that arose, he said.
A perk coming out of the down economy was Carney Engineering’s ability to hire high-quality employees, he said. The firm recently hired two of the top three Penn State University engineering graduates, according to the business, which it might not have been able to do had more competing firms been in the market for them, he said.
One of the ongoing questions as a business owner now that markets are looking up is whether or not to continue hiring staff, he said.
“We’re now doing 70 percent of the work with 50 percent of the people; we’ve been so focused on being more efficient and cost-conscious,” Carney said. “But then, most of us are running on fumes all the time. We know we need to add people. The question is how much is just the right amount.”
Primp’s Summerlin said she’s examining whether her business has enough revenue to sustain hiring.
“I have to go out and get more work, and I need to hire a couple more booking agents,” she said.
But because the economic mess “still isn’t cleaned up,” she isn’t yet able to afford to hire anyone and thus has to keep wearing the many hats she does as a business owner, she said.
Changes in business are not as predictable as they used to be, photographer Martzall said. She’s had to learn to stick to her business plan through the ups and downs, she said.
The small companies that have survived likely did so with a lot of community support, said Sarah Lanphier, co-owner of York-based Nuts About Granola, a business that hand-makes and sells its natural granola with local ingredients.
“People were craving that community-focused business,” she said.
Jean Leamon of Lady Linden always makes a point to take her guests into downtown York and point them to York city restaurants, she said.
She said she’s also kept her rates the same since she opened, trying to be reasonable and attract customers.
Small organizations likely have survived because they were taught early on to be frugal. To build cash flow, they take on as many aspects of running their business for as long as possible before hiring out, Lanphier said.
Intimately knowing your market to make beneficial business decisions also has helped small companies stay open, she said.
“The recession has made more quick-witted, smarter business people,” Martzall said. “You can’t be lazy.”