Friday, May 15, 2009

US Small Businesses Dig In Heels As Recession Bite

Vanessa Baug knows as well as anyone how the recession has ushered in a new era of frugality for Americans. Sales at her once-thriving jewelry store have plummeted. Some days she sells nothing.

"When times were good we were seeing 50 percent more traffic than we are seeing now" at Baug's Vanessa Fine Jewelry in Lakewood Ranch, Florida, she said. She will fight to the bitter end to keep her store open, she said, and is taking on more jewelry repair orders to keep cash coming in.
Margaret Van Voast, who runs a construction management outfit in Falls Church, Virginia, has also seen a decline in contracts. She has downsized her staff to one from four and has enough work to last until the end of the year.

Fairbrother said that while the mortality rate of small businesses was likely to increase, most entrepreneurs who had been squeezed out nearly always started another business venture.
And the recession has not deterred newly laid off workers from venturing into self-employment. Both the Chamber of Commerce and the National Association for the Self-Employed reported an increase in the number of people seeking information about starting their own business.
Most of these people are starting ventures related to their previous employment and are using severance packages and savings to fund their businesses.
"The demand may not be there, but people will still find little niches where they can survive. It is not as easy as it was three or four years ago," said Giovanni Coratolo, vice president of small business policy at the Chamber of Commerce.
For Arnie Brown, the constant effort to keep his fast-food business afloat amid the rising tide of bills proved too much. He closed his Caribbean eatery in July.
But for small business owners, hope springs eternal. Brown said he hopes the federal government's $787 billion stimulus package revives the economy so he could open another fast food joint.

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