Given the current state of the economy, Mississippi small businesses face numerous challenges, and they are finding ways to cope with them.
Ron Aldridge, state director of the National Federation of Independent Businesses (NFIB), says the unstable times have called for timely measures to get through the current economic problems.
“As the economy weakens, small business owners are among the hardest hit — typically because they’re already running their operations rather efficiently and have little room to cut,” he said. “They’re watching the bottom line every day, not just making adjustments every monthly reporting cycle. At the same time, their daily watch-care helps them to sustain the tough times. They already know where every dollar is spent.”
Watching the assets
He says one of the keys to weathering the economic storm is to handle assets carefully, particularly the pricing of goods and services, purchasing and debt and understanding how each decision affects the bottom line and the ability to survive.
“Overpricing is one of the most critical decisions right now,” he continues. “If the small business tries to pass on all of its increased costs, it will probably lose customers. Recently in Mississippi, we’ve seen convenience store operators take a $1-per-gallon loss just to retain their customer base.”
Aldridge also notes that credit cards are a major source of a line of credit for many small businesses. Therefore, with interest rates rising, they’re taking an added monetary hit.
“There has been no evidence of any serious credit problems for most small businesses that have regular relationships with community banks,” he said. “An NFIB survey shows that regular borrowing activity was reported by 34% of the owners, unchanged and typical of readings for the past 15 years. The credit crunch is not having a major effect as of yet on small businesses, many of which are cutting back and not out looking for loans.”
Out of the crowd
Jude Muse, owner of the Treehouse, an upscale women’s apparel shop in Jackson’s Fondren area, feels a small business owner must set herself apart from the crowd at all times. One way she does that is with outstanding customer service, and much of that depends on good employee training.
“I have high standards for my employees and myself. I have my own method of training that works well,” she says. “The number one priority is customer service. I’m very, very adamant about that.”
She’s worked at various levels of retail for 20 years and finds that getting pretty merchandise to sell is the easy part. It’s knowing customers and taking care of them that matters.
“I just got back from market, and as I sat with each vendor I bought with people in mind — particular customers went through my mind as I was choosing merchandise,” she said.
Aldridge feels it’s always important to invest in human capital because they are the most important asset a business has. “I recently overheard two employees talking about the increased costs of everything except their paychecks,” he said. “The ability of the small business owner and employees to work as a team will maximize their sustainability. During times like these, small business has to remain focused on what really brings their business success and do whatever it takes to stay afloat.”
Giving ‘great deals’
The Orange Peel is another Fondren shop that’s doing well these days. Kristin Tubb, owner of the vintage clothing and consignment business, says she really isn’t doing anything different from past years.
“I want everyone who walks in the store to feel comfortable and know they are getting great deals without the whole ‘car salesman’ approach,” she said. “It does not hurt to say that we have been getting some incredible things in. If people are wanting nice things but don’t have the money, they need to come and they will be amazed at the prices.”
Becky Sheedy, a long time employee of Paul’s Mart in Cleveland, says people tell her there aren’t many left like this store that was begun in 1960 by Paul and Jane Clements.
“We sell all kinds of hunting and fishing gear, jackets, coveralls, ammunition, duck decoys, casual shoes and you name it,” she said. “It’s a small store but we have it packed in. We know our customers and what they want, but we continue to get new things we think they’ll like.”
The ability of small business owners to react quickly is also a plus, Aldridge points out. “It’s important to make changes quickly when revenue begins falling and to examine which parts of a business make money,” he said. “Then focus on the moneymakers.”
Generally, there are three obvious quick-fix choices: raise prices to take care of increased costs, knowing there’s always a limit; lower expenses or costs of doing business; and, as the business owner, take home less or nothing.
A team approach and creative marketing are good tools for survival and revitalization of small businesses. Aldridge cites the approach being used by Winona merchants and leaders combined with former residents who currently live all over the country. It began a couple of years ago when Brandon resident Jean McCarty, who grew up in Winona, started a special e-mail account called Winona Talk for all who have some connection to this community. It’s been used to share stories and information from memorable times growing up together to prayer concerns.
“The bottom line is that it’s pulled the people of Winona, past and present, together for the good of their hometown,” he said. “Recently, the subject of how Winona could become a more vibrant economic center to attract more and better jobs came up for discussion.”
Suggestions for the town’s economy have been shared, and November 8 has been set for a homecoming event to bring former residents back home. “The genius of Winona Talk is that it combines the heart of a community over generations and miles and allows a wealth of experience, talent and wisdom to be shared for the benefit of all, without hiring the first consultant,” Aldridge added.
Contact MBJ contributing writer Lynn Lofton at firstname.lastname@example.org.