Today’s economy is challenging, but some longtime Vancouver business owners remember when it was worse.
During the Great Depression, “it was a good day to sell a screwdriver,” said Tom Craig, owner of Vancouver-based Sparks Home Furnishings. His great-grandfather, Marshall Rowe Sparks, founded the business in 1882.
The company struggled like other businesses at the time, but made it through because of cash reserves.
“Marshall was very tight with the money, he was of that old breed,” Craig said. “The bank asked for cash from us to help cover their withdrawals.”
More than seven decades later, Craig said business has been slow for about a year.
“We’re connected to the housing industry,” he said. “We’re very much tied in with consumer confidence and it’s at the bottom now … (Furniture is) a very deferrable purchase.”
To make ends meet, Craig has cut inventory, about three staff positions and expenses for services like advertising. But he fully expects to make it through these tough times.
“Because so many of our competitors have gone out of business, those remaining are going to have increased market share,” Craig said. “If you can make it through the downturn, there will be a big upswing.”
Old fashioned business sense
For Joe Beaudoin, keeping his agricultural business alive for 35 years has come down to simple frugality.
“I’ve always been a saver,” said Beaudoin, owner of Vancouver-based Joe’s Place Farms. “I never believed in going heavily in debt. I’ve always tried to stay solvent. For the last 10 years, I’ve owed nobody.”
A key to saving money as a business owner has been a simple but effective principle: Keep business money separate from personal cash.
“The business account should never be tapped for personal income,” Beaudoin said. “You just have to make that determination.”
He also has saved business money by being a do-it-yourselfer, building his own home, store fixtures and agricultural equipment.
When he can’t build it, he buys used.
“I see so many farmers and businesses each year with a brand new truck or tractor,” Beaudoin said. “I have never owned a new car or a new tractor. I can buy four used tractors for the cost of a new one. It’s much more efficient.”
He plans to continue his frugality during today’s hard times, but said he expects new customers to come his way this year – the farm’s biggest ever for tomato sales.
“They say that when the economy is in recession, the farms thrive,” Beaudoin said. “It’s not as much now as it used to be but people tend to do more canning rather than rely on the stores.”
Strategic investing
In a much different realm, Clint Page became chief executive officer of Dotster shortly after the burst of the dot-com bubble.
The Vancouver-based web hosting company was founded in 2000. In his first year, Page said the market was quite difficult and Dotster’s reseller-based model focused on selling to other companies rather than directly to consumers.
“As the market tanked, I realized that was a failing strategy because if we didn’t have products to up-sell to customers, we couldn’t survive,” he said.
Page and his team trimmed marketing dollars and looked at the company’s cost structure, focusing on return on investment per full-time equivalent employee, and how the company could operate as efficiently as its competitors.
And to draw clients, Page looked for ways Dotster could offer new web-based services at lower costs. Dotster was one of the first web companies to use online shopping carts and automatic renewals, he said.
When the dot-com industry cratered in 2002, Page created infrastructure that allowed Dotster to acquire suffering companies, ensuring their survival along with Dotster’s.
“We struggled, but were able to improve our footprint,” Page said. “We were able to buy (companies) for cents on the dollar and that was extremely effective for us.”
Dotster has acquired 17 companies since 2002, and carries no debt, he said.
“Now is a good time to be looking at those kinds of things,” Page said. “(This kind of economic challenge) tests your business model…It’s hard on everybody but you can make strategic investments so when things turn, you can grow at a disproportionate rate to others.”
Carrying large debts and being unable to get financing forces discipline. Having that kind of challenge early in the company’s history taught Dotster’s leadership to focus on flexibility, he said.
“I think the more traditional industries struggle more with a ‘this is how it’s always been’ (mentality), whereas our business has always been like quicksand, always shifting,” Page said.
Getting the job done
Vancouver-based Erik Runyan Jewelers saw hard times during World War II.
“(My father and grandfather) were working with liberty ships in the Kaiser yards,” said Erik Runyan, current owner of the 91-year-old business. “My father would come down and open the store at night to work with the swing shift workers. He would stay until after midnight and go back home.
“He ran the business according to what needed to be done.”
Runyan has seen a marked drop in the Vancouver store’s traffic and sales, but said close ties with his vendors put the business in a good position.
“In the good times, I thought to develop relationships where there was trust and confidence,” he said. “When times slow down, if there’s anybody I can lean on, it’s them.”
Keeping his business small and local also has been to his advantage, Runyan said.
“We have some adaptability,” he said. “We can watch expenses and deal with vendors in close relationships and take advantage of the fact that we’ve been doing this a long time.
“I can stop buying, I can advertise more or less – I can just move quickly.”
LAWS OF SURVIVAL
• It used to be all about location – now it’s about diversification.
• Reevaluate resources available to you and find new ways to use them.
• Brainstorm with employees for new product and service ideas. Try to reach their untapped talents.
• Find ways to move products quickly. Try eBay, Craigslist or giving donations for tax write-offs.
• Keep a good relationship with suppliers. Stay in touch with them so they don’t worry about your follow through.
• Diversify your supplier list to keep things moving.
• Order smaller quantities of merchandise when possible.
• Organize cooperative buying and selling events with other businesses.
• Keep in constant contact with clients to be sure of what they need you to produce.
• Look at possibilities for government clients.
Source: Janet Harte, Washington State University Small Business Development Center
Charity Thompson can be reached at cthompson@vbjusa.com.
