Sunday, March 29, 2009
Increased unemployment, decreased consumer spending and tighter credit markets. Sounds like a bad time to expand a business, right?
Wrong. Some businesses in the Shoals are bucking the local and national trend of corporations in holding patterns, waiting for better financial times. From fitness to pharmacy, art to stationery, several business have expanded during the record-long recession.
Printer & Stationers, or PSI, completed renovations to their 75-year-old business in November and expanded their commercial focus to include retail.
"We've had this on the drawing board for months," said co-owner Mike Johnson of the 90-day renovation. "Part of bucking the trend is renovating the store and renewing our commitment to downtown."
The owners hired a retail consultant who advised them on roughly 2,000 items that constitute 99 percent of most stationery businesses.
"We wanted to address the retail segment," co-owner Bob Cox said.
PSI has six copier technicians who maintain thousands of copiers. The store also now sells $200 printers. An open house is planned for Friday.
Steven Barnes, owner of Barnes Health Care, said that his vendors gave him incentives to expand after several local banks turned him down for small business loans.
The new location opened in August near the height of the economic meltdown but still managed to expand the floor space from 2,500 to 14,000 square feet.
He finds ways to keep the business active and current. For instance, Barnes leases a display from foot care specialist Aetrex for $250 per month to exhibit orthopedic shoes, insoles and an iStep station that measures foot size, arch and pressure points and displays results on an LCD TV. Golden Technologies, which produces lift chairs, gave Barnes extended payment terms.
"It is difficult to open a business during a recession. People are not spending as far as your smaller items," Barnes said. "We do a lot of insurance (business) compared to cash (business)."
Barnes also developed an online presence in November, which now constitutes 10 percent of his business with 70 packages shipped daily, many out of state.
"We are trying to grow that now so we are not depending on the person buying that toothbrush," Barnes said.
Barnes said small business is the backbone of the American economy, a claim backed by numbers.
Small businesses, defined as those under 500 workers, employ half of American workers, according to the U.S. Small Business Administration.
Other businesses that have recently expanded include:
- Gold's Gym, which opened a new location on Cox Creek Parkway.
- Fashion designer Billy Reid will open his Florence headquarters in May after he opened his New York City store in October.
- McGraw's Coffee House expanded next door into the Artisan Showcase that sells art from 65 artists and offers classes and art demonstrations.
- Tennessee Valley Printing Co., which includes The Decatur Daily and The Moulton Advertiser, expanded its operation with the acquisition of the TimesDaily.
Expanding businesses are bucking the wait-and-see trend.
"Everybody right now is playing it cautiously, looking for indicators that the economy is showing an uptick," said Steve Holt, president of the Shoals Chamber of Commerce. "Businesses can handle positive news, businesses can handle negative news - iffy news or no news, the business community deals cautiously with that."
David Winkle, owner of Winkle World in Sheffield, said the facility will be getting a facelift, including a reintroduction of go-carts and relining the pool in an effort to try "to get our stuff back in shape."
Instead of loans, Winkle said the company will use cash reserves from the business.
One of the main incentives for the renovations: Material costs for amusement parks have dropped, Winkle said.
By the mid-April opening, Winkle expects to have the go-carts up and running, with bumper boats possibly by early 2010, depending on the economy.
"We're mainly trying to get everything back in shape, then look for additions," Winkle said.
Not only retail businesses are expanding.
Margaret Forsythe, a mechanical engineer and founder of Forsythe & Long Engineering, said the business is in the process of expanding.
The expansion was preceded by lean times when work was extremely slow - the slowest in 15 years of the company's history, Forsythe said.
The engineering firm focused on the auto industry, but Forsythe realized the slowdown a year and a half ago and the firm decided to change focus to what Forsythe called a "recession proof" industry.
Forsythe said during the slowdown, the company used reserve funds and a credit line to keep afloat.
"And I didn't get a bailout," she said.
Trevor Stokes can be reached at 740-5728 or trevor.stokes@TimesDaily.com.
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