MerchantCircle Forums > The Economy and Small Business

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How is the Current Economy Affecting You!

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Tough Times?

This is a great topic for a thread, and I'd love to see some feedback from members on how the current economic climate is impacting on businesses.

With increasing foreclosures, home prices in many areas tanking and  the credit crunch restricting borrowing in many sectors, I would expect that business owners are feeling it too. 

Have you experienced a change  in recent times as a result of this? 

Big business, or small...Have you found some tips that worked to limit the impact on your business? Please let us know about your experience, and how you see the future from your vantage point.

 Lindy

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How is the economy affecting our businesses?

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Custom Home Building Decline in Raleigh, NC

The real estate market in our area has been booming for at least a decade now, but it appears that we have hit our first  decline in many years.  These circumstances can work to the great advantage for those wishing to have thier own custom home built.

There are several reasons for this advantage.

First, there have been many periods when builders were so busy, they were not interested in 'one house' contracts.  Their time and resources were better spent developing subdivisions. However, with 'Spec' homes being a higher risk in the current economy, there will be a wider choice of home builders available for hire.

Secondly, the rush is off. When the economy is booming, builders naturally want to complete homes as quickly as possible to get on to the next project. A home built at a slower pace will almost always be a better built home. There is time to do the job right.

Third, the downturn in buisness weeds out poor workers. When times are good, there is a glut in labor. Often, builders will hire whomever is available to get the job completed as quickly and cheaply as possible.  With the lack of excess work to do, only the best subcontractors are being chosen to do the jobs available. This also translates into a better built home for you.

Fourth, a cheaper home. With the competition present when more builders are competing for fewer jobs, the cost of homes are driven down. It's a buyers market. This applies to lots available as well. Many sellers are afraid of 'sitting' on their available property for long periods, and will be willing to sell at a deal.

All of these advantages make this an ideal time to buy in the Triangle. It's not likely that the present circumstances will remain very long. Most people in the industry predict that the upturn will begin again within 6 months. Wise buyers will take the opportunity to build while the market is in their favor.

Daniel Brant

Brant Custom Homes

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How the slow economy is hurting my small business

   Not only am I a women owned small business, but I provide a luxury services (entertainment and decorations/theme props) that is driven by the state of the ecomony. As people have to provide food & beverages based on the number of guests as their main expense, and the rental fee for the location.  Entertainment can be limited by the number of options they select, and decorations is generally based on if they have any money remaining in the budget!

    We are hendered by the surging gas prices as we drive to every event that has props/decor, and our entertainers drive to each event.

  At a time when gas and health insurance, liability insurance, and just about everything is going up, we find the need to reduce our pricing on anything we own. The entertainers have not had an increase in two years. The 1st thing people say is not to lower pricing, but I look at it that my bills are coming due no matter what I do and if I am not bringing in revenue what good does it do to hold my prices firm.

     I have reached out to other companies in my same business that do not own as many props and started renting to them at 50% off the market rate. They in turn rent it to their clients, making a profit. And as they pick up and return my props directly to my facility, it allows my staff to take handle our events.

    I have worked this site taking full advantage of the blogging, newsletters, coupons, and networking options. I have linked my main website, with this site as well as my MySpace and CitySearch sites. I have found that this has increased the visits to this site 100%.

    The Newsletter is a way to stay in front of my client even when they do not have an event scheduled. while the coupons are an opporunity to get them to book extra services.

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Credit Crunch

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Challenging Times

Daniel - Custom homes could well keep moving in these times. Having worked in the industry in Australia, I can tell you that there is a market of people who have money, are particular about what they like, and don't necessarily easy to find a builder who can be flexible and deliver the home that the dream of.  Tailoring your marketing to your specific clientele can help... and developing a reputation that supports that you deliver what you promise is excellent.  Most times,  your existing customer base is a great place to start. Maintaining a marketing database, is so essential for any business. Some will come back to a business again, and repurchase, and you know they have talked to many people about their new home over the time it is being built and the next few years.

Cindy - good idea on the 'new ideas from old'.  I actually know a builder who decided to stop building, and now rents out his scaffolding to other builders for a nice profit. He's decided to just install  tempered Italian glass kitchen splashback, and save himself the hassle of running staff, and massive outlays.

David - Have you looked at other means of raising the capital? Are there other ways that you could achieve what you want to achieve,  through some collaborative means? If you could do it... what would you need to do?

Lindy

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Hi Lindy

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Sorry

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Show Me The Money - David

Have you tried some of the "other" sources like www.prosper.com?

Really, it is a problem for investors too, finding a reliable place to put some money.

Are you a good bet?

Lindy 

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Its Me Again

Lindy, I have not heard of prosper.com, I will look them up.

I realize every venture is a risk to some extent, some larger than others. After three years of  the water line just below my neck, this will drop it considerably. I have been working with the Small Business Devolpment Center at the University of Delaware. They have been very helpful, we put together a very tight business plan that everyone likes. It all boils down to have not so good personal credit, and the business has none. This is a very big catch 22. My personal credit took a crunch when I opened the business, slow sales start with everyday things hurt it quite a bit. I just keep saying I need someone to believe. I'll keep looking and hoping, but I'll still go foward one little step at a time.

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current economy effecting you

Let me count the ways...............

My husband and his father have 2 sterio installation shops.  and they are going down hill.    The mom and pop stores are going by the wayside.   I largly blame the box stores.   They have junk for cheap.   but because they are putting out the smaller stores,  and even the large companies are cutting down. people are loosing thier jobs and have less money to spend.   I also think the internet has hurt too.   Its become a blessing for some but has really hurt alot more.     The internet sales have cut into the mortar stores.   People sit and buy online.    Now i will call my self a hypocrite because i buy online too,  I go to the box stores.   but our choises are becomming few.   More and more people have started internet business,  that alone cuts into each others sales.    Now alot of people are making alittle money.     

Lisa

skytopdesigns.com

spraytexx.com

planethi-fi.com

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Big Box Stores + Online Purchasing

My husband and his father have 2 sterio installation shops.  and they are going down hill.    The mom and pop stores are going by the wayside.   I largly blame the box stores.   They have junk for cheap.   but because they are putting out the smaller stores,  and even the large companies are cutting down. people are loosing thier jobs and have less money to spend.   I also think the internet has hurt too.   Its become a blessing for some but has really hurt alot more.     The internet sales have cut into the mortar stores.   People sit and buy online.    Now i will call my self a hypocrite because i buy online too,  I go to the box stores.   but our choises are becomming few.   More and more people have started internet business,  that alone cuts into each others sales.    Now alot of people are making alittle money.     

Lisa

 It is a real problem Lisa. And definitely not the solution for small operators to even attempt to compete on price with a big box store. Yet there are advantages to a small operation that a big box store can't compete with, that that is in the area of service and building relationships with customers. Getting a good database of customers working as an integral part of the business is one essential element. Reviewing how the business works, and looking for ways to differentiate your business, will help to find the ways that you can compete and in a way that won't send you broke to do it! 

Purchasing price can also be a sticking point, and good inventory practices, not overstocking and having suppliers who can be reliable and fast in providing your items can help, as can negotiating the best prices you can, and sometimes a buyer group can be a way to secure a better price. Things like delivery costs, what you charge customers and how you package that with your sales can also have an effect on the bottom line.

Fortunately, as online sales take more and more of the available money people have to spend, the Little Guy finally can compete. Online sales are a way for the small operator to fight back, and having a strategy and a plan to achieve this is critical.

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Re: How is the Current Economy Affecting You!

The economy is certainly getting harder to deal with with daily rising gas & food prices. But fortunately because of the industry we are in, Network Marketing, we're able to ride the tide, so as to speak.

13 yrs. ago, we owned a Cash Register/Computer business. We had 13 employees, 2 store fronts and took care of cash registers for resturants, the county school system, hospitals, in Northern & Eastern Florida.  Our business involved long hours, being constantly tied to the phone, never being able to take a vacation, dealing with employees, their problems, customers who wanted everything for nothing, government taxes and getting a paycheck only after everyone else was paid 1st.  It was certainly a high stress business, esp. when a customer's register broke down in the middle of the night & you had to go fix it, because your employees refused to go after hours.

At first, we thought we were not interested in working another business, but for our health, we wanted to try a certain product as we needed energy and had some health challenges. Then we recommended that product to some friends, that they try this product because it worked greatly for us & maybe it could help them as well. Next thing we knew we got a check in the mailbox from that company. The next month the check was bigger.We then started thinking that we needed to check this company & network marketing industry out, to see if: (1) they were legit (2) the industry was legit, (3) if it was possible to earn a full time income with them doing what we were already doing.

It was real &  after matching our income with network marketing-promoting and using that liquid nutritional product  for our health, (aprox. 2 yrs later) we sold our carsh register business and it was one of the best decisions we ever made. No more stress from employees, customers, etc.

The network marketing industry has supplied our sole income for 11 yrs. now. And each month our income continues to go up. Now this is not to say we're rich. (I guess if we wanted to push it harder, we could be). But we have enough to pay our bills and enjoy life. Plus, our company-ForeverGreen, just rewarded us with a new 2008 Honda CRV with their car bonus program.

ForeverGreen is featured this month in "Your Business at Home", a magazine that you can read & purchase in Barnes & Noble Bookstores. I also feel good about this company because they are determined to do something good for people (improve health & fight against drug addiction) and the environment (Captain Planet sponsor).

I strongly suggest people think about getting involved in the network marketing industry as a plan B (in case something happens with your 1st job, or you can't work), or to back up their income with a little extra income, because with the way the economy today is going, we need all the help we can get to make ends meet.

http://www.marinephytoplankton.com

http://www.myownboss.us

or call Dan at (321) 723-0929 if you'd like to talk further about this.

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Re: How is the Current Economy Affecting You!

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Re: How is the Current Economy Affecting You!

A NO-NONSENSE APPROACH!!  THAT'S HOW.

As a virtual assistant in this present economy, I must admit, small business owners would rather perform all of the services that I have to offer themselves or use a family member.  I realize that the state in which the present economy is in...The fear of "spending money" is a major factor and is on the rise and people cannot or will not see past today.  They don't realize that spending a little today can save them plenty tomorrow.

A smart move....building trust, staying committed to your mission statement, offer solutions, and take a no-nonsense approach to learning new things that are in demand in your industry.

Alba