Small businesses hit hard times: 'The worst I have seen it'
By GENE ZALESKI, T&D Staff Writer Sunday, November 30, 20081 comment(s) | Default | Large
Orangeburg small business owners say the much-talked-about economic downturn has hit close to home, resulting in lower sales and forcing businesses to streamline operations just to stay above water.
Lenaire Wolfe, owner of Wolfe Heating and Air, said home heating and cooling unit sales have softened, particularly in the last quarter.
The tight times, he says, have prompted him to consider shortening the work week by the year’s end for his seven employees.
“We are trying not to lay off anybody,” Wolfe said, explaining tighter times have required sharper business skills.
Wolfe says the soft sales are due to a sluggish housing market, personal financial hardships and general negativity among media that has created widespread fear and chilled spending.
“Concern is fine but not all this gloom and doom,” Wolfe said. “I think it has been overdone a little bit.”
Ferse 5&10 owner Roy Chandler estimates overall sales for the year are down about 1 to 2 percent. He also says more and more customers seem to be tapping into their 401(k) and retirement accounts at his business, which also serves as a check-cashing outlet.
He said there has been an increase in credit card sales, with an average of 10 to 20 a day, up from an average of four a day in previous years.
“I know people are cutting back,” Chandler said. He said in his 59 years as a small business operator does not recall as much talk about the economy nationally.
“It makes everyone tighten up their belts,” he said. “All my customers are talking about their stimulus checks.”
Chandler said he has had to take some cost-saving measures, including not hiring after college students returned to school at the summer’s end.
Chandler said a smaller staff means he is spending more time on the sales floor.
“I am doing a lot more work now,” he said.
Dave Garrison, owner of Automated Business Systems, said copier and printer sales have dropped over the past four to six months, falling by 15 to 25 percent from a year ago.
“We have seen a definite slowdown in purchases of certain big-ticket items,” Garrison said. “We are finding people who are saying, ‘Can I get another year out of this equipment?’ They want to know if they can ride the horse for another year. Sometimes I have to say this horse needs to be put out to pasture.”
As a 25-year veteran in the business, Garrison said he does not “remember it ever being quite like this.”
“People are reluctant to buy unless it is absolutely necessary,” he said. “This is certainly the worst I have seen it.”
Garrison said he has seen some increase in the sale of higher-end printers and copiers with more features, attributing it to staff cutbacks.
“The machines ... will help them do all the stuff they need to do in some instances with less people,” Garrison said. Despite the downturn, “people still want to get service and feel like they will get the product that will last long term.”
Chandler said the wholesale suppliers and manufacturers he purchases from are working harder to sell items to him.
“We have cut down on purchases,” he said, explaining freight costs have cut into profits.
“We try to buy from people who give you a break on freight. I am so happy gasoline prices have gone down,” he said.
In the meantime, Wolfe said he hopes elected officials will continue to act favorably toward small businesses by maintaining the investment tax credits on certain purchases and not enacting a universal health care plan or increases in the minimum wage.
“I am scared what we will have to do to require health care and at what price,” he said. “They are talking about universal health care. ... That could impact small business pretty severely.”
Also, raising the minimum wage from $6.55 an hour any further will “devastate” small business by eventually pushing other wages up, Wolfe said.
“If they do that, that would increase prices and then you have inflation to worry about,” he said.
Chandler said he has noticed a certain optimism among customers with the new leadership in the White House under President-elect Barack Obama.
“I myself am hoping he can swing this thing around,” he said.
Garrison echoed the sentiment.
“We certainly hope it will improve. We have to keep coming in and offering service and offering product. We need to be there in the ditch with the frogs.”
T&D Staff Writer Gene Zaleski can be reached by e-mail at gzaleski@timesanddemocrat.com or by phone at 803-533-5551. Discuss this and other stories online at The TandD.com.
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orangeburger wrote on Nov 30, 2008 3:42 PM:
for those of us running small businesses, we are in a toxic envoirnment of high taxes, high property taxes, poor quality workforce with a forced need of hiring more and more people to do jobs that one person used to do in the years past. I have noticed an unprecedented level of feeling of "entitlement" and a workforce that is drwoning in debt, mostly a bed of horrors they have created for themselves by living way beyong their means. I am projecting job losses to a minimum of 30% over the next six months in most solvent businesses that employ 50 or fewer employees. Healthcare which hitherto enjoyed some immunity from recession will be hit the hardest. I doubt the local healthcare business models can survive this financial tsunami wihtout serious and honest examination of their workforce needs. For example, the hospital has rapidly inncreased its salaried workforce to the the point of bankruptcy. It is hard to ask employees to take immediate 30% paycut and drop benefits. usually they will rebel or start acting up. Employers will have no choice but to eliminate these positions. . Employees who do not smarten up, maintain or improve their skill set, improve the quality of their work will be the most likely to be dropped first. Very uncertain and truly a testing time ahead for all of us. "