Last week, when Ellen Rossiter Houpt was discussing some marketing work for her company, Carolina Corporate Wear, the topic of payment came up. Perhaps, Houpt said, she could offer some work in return - the public relations company's logo imprinted on something?
"They said it was something they'd consider," she says now.
It is also, she says, one of several ways she's trying to save money, like most business people in this recession. A new poll shows how far small business owners are willing to go.
Some measures are all too common in this economy, including half of small business owners cutting staff and 16 percent cutting benefits, according to the survey, conducted by Echo Research and sponsored by American Express. Like Houpt, 45 percent are open to bartering with customers or suppliers.
Some have resorted to more drastic moves, including 30 percent who stopped taking a salary and 27 percent who have family members working for free. Sixteen percent of owners have taken a second job to help pay costs.
"Small business owners are creative and resilient," says Alice Breden, a small business consultant for 20 years who consults with American Express' small business division. "They're twisting and turning and trying everything."
Houpt started Carolina Corporate Wear in 2002, and the Charlotte company has since had two full-time employees - she and her husband, Matt. "Basically, we put a corporate logo on anything and everything companies want to put a corporate logo on," she says.
Her company began feeling the bite of the recession at the beginning of the year, she says, and she and Matt did what all good owners do - looked over all their processes and bills in an attempt to find savings. They also, at times, have stopped taking a salary, although like many small businesses, that was determined more by money that wasn't coming in. "We think of it as being completely commission-based," she says.
Recently, they considered having Matt look for a second job, but decided that the energy spent finding one would be better spent finding new business for their business.
For now, they are confident they can make it until that happens. They have good credit and access to capital. They are lean. And, like 45 percent of the small business owners in the survey, they are ultimately optimistic the economy will come around in time for them.
For many, it's what they have to believe. Breden, the small business consultant, says her research has long shown that small business owners can't imagine themselves doing anything else. "Yes, it's stressful, and you get gray hair," she says. "But once you run a small company, that's all you want to do."
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3 comments:
It all comes down to one thing: Cash Flow.
The most powerful engine in the world will screech to a stop with out oil.
Any size company will do the same with out keep in their eye on cash flow which is the oil of business.
McClatchy, Observer's owners is a prime example of this problem.
I have been asked to invest in several small companies over the last few months and each time I have looked over the proposals it is always clear; they have waited too long to find help or look outside their operations.
Ask a retired person who is well rounded in business to look over your operation for cost saving measures. Sometimes the sacred cows you think you have should not be immune to budget review.
Let's face reality. Big businesses are killing the small businesses. When big business takes a 'pay reduction' we small businesses die. This economy was made and destroyed by the big companies disregard for those of us at the bottom that keep the machine running. The more they continue to look to the government for bailouts and for others to blame, the more small businesses will outright die. Vicious circle that all starts at the top.
Peter, you had written a while back about another small company, a tile company in Matthews if I'm not mistaken that had to cut back to just the husband and wife who owned it. Well, shortly after you wrote about them, I gave them a call and had to leave a message because they changed their hours to close at 2pm, but no one ever got back to me. Perhaps the job I offered wasn't one to their liking, but it was a job that paid cash money. So the job went to someone else who was relatively new to the market, but nonetheless did a good job. My reason for relaying this to you is two-fold. One, I think one problem is that folks have become too selective in their work a lot of times. They do what they want to do when they want to do it without caring so much about the consumer who is paying the bill. And second, I hope the company owners see this blog and think about what happens when you don't call customers back. I've already lined up the guy who did my work with about 5 other folks who would like work done and I'm sure there will be more to follow from them. Stop bellyaching about how hard it's been and how you've had to cut back so much. If you want the work then get out there and work.
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