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Small business report card: Slumping economy taught business owners to survive and thrive

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What’s the report card for local businesses? Former teacher, and in this case current model, Nita Paine, Wenatchee, points out a probability in downtown Wenatchee.

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Here’s a surprise: Many small businesses in the Wenatchee Valley survived and have since thrived using lessons learned during 2007-2009’s recession, the nation’s worst economic slump in more than eight decades.

More efficient operations, better-trained staff, smarter budgeting, cautious risk-taking and bucket-loads of optimism by owners and managers have helped many locally based enterprises prosper in the last four years, according to an informal survey conducted last month by Wenatchee Valley Business World.

I am now definitely more hands-on in all aspects of the business than I was five years ago,” said Deanna Bollinger, owner of Nancy’s Party Rentals in Wenatchee. “I have more control over inventory, both rental and retail. We’ve changed locations and streamlined our staff and operations to keep costs down.”

Bollinger was one of 20 respondents to a Business World questionnaire sent to area retail and tourism businesses to gauge the health — post-recession — of local firms. The “Small Business Report Card” focused on six facets that included risk, staffing, financing, performance, overall business practices and an outlook for the future.

Among the results, the survey showed that since 2008 many local businesses revamped operations to gain efficiency, maintained or increased staff to offer quality customer service and remained confident of customer loyalty. All of which helped their businesses grow, they said.

We really had a deliberate and disciplined approach to growth,” said Ron Berschauer, owner, president and CEO of Jerry’s Auto Supply, which has seven stores in Chelan, Douglas and Okanogan counties. “And that’s what allowed us to prosper.”

In the recession, he said, “we were forced to hold expenses and grow the revenue side. Some single-store sales dropped, but increased corporate wide. Today, we employ significantly more people, but as a smaller percentage of sales. Business for us, right now, is very good.”

Brandon Wright, manager of Stan’s Merry Mart in Wenatchee agreed. “We’re in the process of remodeling our clothing, footwear and sporting goods department,” he said. Since 2009, “We’ve grown the business and increased our focus on customer service. Customers have shown and told us that they appreciate these positives.”

At Wenatchee Natural Foods, owner Josh Parrish said he expanded his business to add beer, wine, meat, dairy, fresh coffee and a raw-food deli and cafe. Staffing is up 35 percent from three years ago to hit 13 employees.

We actually got more aggressive when the recession started,” he said. “I didn’t have a ‘sky is falling’ mentality, but it took time to revamp the store” — and operations — “to continue to offer more to customers.”

Brian Thorpe, owner of Global Car Care, said the recession forced his company to become more efficient. “We had to do more with less, with fewer people,” he said, noting that he consolidated two auto shops into one that’s now nearly as busy as the two shops once were.

Taking calculated risks has also been part of some business’ recession-recovery game plan.

In a small retail store environment, we have to take risks all the time to see what works for our clientele,” said Jaimi Delagrave, co-owner with husband Joe of Button Jewelers in Wenatchee. “If you don’t take risks, you may never see what could have been. Thankfully, as the economy improves you tend to gain confidence, which eases the stress of risk-taking.”

Jeff Lau, co-owner of Plaza Super Jet in Wenatchee, said, “I feel we have to take risks to attract new customers regardless of the economy. We just can’t afford any poorly calculated risks. Running the Plaza is a lot like running my motorcycle — I do have to be careful.”

For others, the economic slump and years following taught some business owners to approach risk in a more conservative fashion.

Dimitri Mandelis, co-owner and president of LocalTel, the area’s largest Internet provider, said mergers over the last two years have slightly weakened his company financially — they used cash to buy expansion companies — so care is needed in any risky ventures. “Our sales are quite a bit higher, but staff and overhead costs have increased, too,” he said. “Margins are tighter because of the recession and because of increased competition.”

Thorpe at Global Car Care said he’s probably a little less eager now to take any business risks. “The country’s economy has no clear direction, no clear leadership that’s giving anybody any confidence,” he said. “In fact, a lot of things are giving concern — rapid expansion of the IRS and EPA, for instance, and I have no faith in (Washington governor) Jay Inslee.”

One risk avoided by most businesses in the survey was borrowing money or over-using other types of credit. In fact, over half of the surveyed businesses tried to avoid loans and financing altogether during the darkest recession years.

Financing? “It stinks,” said Steve Sturzl, owner of Chinook Music in East Wenatchee. “It’s not as available as it was before the recession hit and, during the recession, commercial financing virtually disappeared. It was a real scramble, a real nightmare, for us (to obtain a loan for expansion), but we managed to get it. I don’t think it’s any easier now, even years later.”

Delagrave at Button Jewelers said, “The availability of financing and credit are still out there, but you have to jump through twice as many hoops to get approved.”

And Berschauer at Jerry’s Auto Supply added, “Regulations surrounding borrowing have tightened immensely. We’ve had to jump through hoops that at times even embarrassed the bank.” Even with large down payments, he said, borrowers are required to supply financial statements on every partner and shareholder, along with full appraisals on any property used as collateral.

Still, a large majority of surveyed business owners and managers expressed optimism for future growth and projected a rosy outlook for small business in the Wenatchee Valley.

Sure, sometimes in the bad economy it felt like we were paddling into the wind, but it didn’t mean we’d quit paddling,” said Sturzl at Chinook Music. “It’s like this … when the pie gets smaller, and your piece gets smaller as a result, you have to go out and find more pies.”

Sturzl added, “Maybe I’m a little too boneheaded to see the reality sometimes. I go right over the bumps and just keep on going.”

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