How Did Laurel Business Deal with The Recovery Lag of 2010?

Last week, in the launch of Laurel Patch's business column, I told you about a business grant meant to entice business owners to move their operations to Main Street. As this is the last column of the year, it's the right time to take stock in where we've been so we can get a handle on where we are going in the future.

According to Sageworks, an organization that analyzes financial data, economists say that our national recession ended in summer, 2009. Among the business trends for 2010, Sageworks listed The Recovery Lag. According to that "lag," national retail sales rose about 2.6 percent for 2010, but the trickle down to small business owners was slow to follow. In fact, Sageworks reported that sales for small businesses nationally fell another 5 percent in 2010.

In my last column, James Collins, the information director for the City of Laurel spoke about Main Street's small businesses. He said that while the small business districts in other parts of the country are dying, Laurel is not only surviving, but thriving. He was pretty proud of that fact, and he's right. We should be proud of that.

What did 2010 mean for small businesses in Laurel? Was there a Recovery Lag here in 2010?

Kristi Casey, owner of Just for Pets in Scaggsville suffered the Recovery Lag, but her business, a niche market, has survived since 1986. While national chains tanked during this economic debacle, Just for Pets is chugging away. Even if it didn't have a profit for 2010, holding ground is a victory.

Casey said that she understands the lack of sales for her particular item in a declining economy. She sells birds and all of the high-end goods for birds that can't be found in a chain pet store. Birds live a long time, so people just aren't buying more in this economy. Still, she knows that people drive an hour to her store to find the items for the birds they have. So she keeps offering personal service, knowing if she stocks it, they will come.

Holiday spending which makes up for lagging sales for most retailers, didn't help Just for Pets, said Casey. In fact, sales went way down. She said that unlike other businesses, for her business, slow holiday sales are the norm. January tends to bring in more money than the traditional holiday months. The people who visit her shop were out buying holiday gifts for others, not shopping for specialized items for their own birds.

Other Laurel businesses haven't seen The Recovery Lag that was a big national trend for 2010. Bob F. Chance is the general manager for Carol's Western Wear, with locations in Laurel and Glen Burnie, as well as an Internet presence at www.carolswesternwear.com. They specialize in cowboy boots and hats, buckles and clothing. Chance was busy crunching the numbers for 2010 when I called to ask about sales for the year.

While Carol's didn't have a banner year, according to Chance, sales at Carol's increased in 2010. The beginning of 2010 started out with slow sales, but Chance expected that.  Sales picked up toward the middle of the year. In November and December, for the holidays, "it was noticeably better than in 2009." He added, "Of course, it would have been hard for it not to have gotten better than 2009." One of those bittersweet victories.

Retailers often count on an upswing of sales during the holidays to see them through the rest of the year when sales may be lean. A good holiday season can help pay for fixed costs until business picks up. The holiday season sales pulled out a win for Carol's, said Chance.

With a downturn in the economy, small businesses need to figure out a way to roll with the punches because they don't have the financial cushion larger businesses come to enjoy. For a small business, retained earnings may equate to a van and some inventory.

That sounds pretty dire, and it is to many a big business. For entrepreneurs, however, that back-up-against-the-wall feeling kicks them into creative marketing gear.

Chance explained that initially Carol's trimmed costs and inventory, a basic sign that a business is going to hunker in and try to wait it out. Soon we all learned that there was no waiting this one out. For Carol's, that entrepreneurial spirit kicked in and the company started to think of inventive ways to garner customers. Ironically, Carol's Western Wear went American.

They looked at the political and national climate and decided that while five years ago "Buy American" wouldn't have caught the attention of many Americans the way it used to in the '80s, said Chance, but in this climate, it carries more weight. "We replaced the boots that weren't made in America with ones that were. And, we found that they were cheaper! I think that move helped very much."

As with Carol's, Poist Gas Company Main Street (www.hjpoist.com/contact-poist-gas-laurel-md.htm) bucked the national trend of decreased sales for 2010. Sales increased a bit, said Dana Underwood, a granddaughter in the family-owned business that supplies propane gas mainly to residential clients. Underwood has worked in the nearly 75-year- old company since she graduated high school, handling the finances.

Poist decided to rethink some of its marketing strategies, according to Underwood. The company put up a website in 2010 to attract new customers, and it's working. Poist has depended on residential sales to carry business, but in response to lagging sales and collections problems, it started focusing on commercial markets in 2010, said Underwood. "The stops tend to be larger quantities and better pay (records)," she explained.

So, overall, Laurel business ran a bit ahead of its national counterparts for 2010. In large part, that ability to stay even or even show a profit during such lean times, stems from entrepreneurs doing what they do best—seeing a problem and solving it.

Next week's column gives local businesses a chance to vent and/or beg a bit. I'll be asking businesses to look to 2011 and let President Obama, Congress and the city of Laurel know what is needed to make 2011 more prosperous for small business. If you're a business owner, please drop me a line letting me know what kind of help you want for next year (whether it be tax incentives, stimulus, help with hiring, whatever).

Kim Remesch has written for national business publications for more than a decade. If you are opening a new business or have a business issue you think should be covered in an upcoming column, please contact Kim Remesch at terpgirl30@yahoo.com.