Small Business

HERALD SPECIAL REPORT | To recover, small businesses in our area are diversifying

MANATEE — The recession packed one relentless punch after another when it hit the U.S. economy.

It sent stocks tumbling. It delivered a black eye to the banking industry. Small businesses were bruised and shattered; millions of American workers were, and still are, left scrambling for jobs.

The National Bureau of Economic Research, which declared the recession started in December 2007, isn’t ready to say it has ended yet.

But small business owners aren’t sitting around waiting on that official word. They are inventing new ways to create revenue, renovating old business models and taking risks to become more profitable.

“The (consumer) demand is down and it forces the companies to just look at the way that they’re going to really advance in the future with their company,” said Eric Basinger, executive director of the Manatee County Economic Development Council. “Some companies are diversifying — they’re trying to get into new markets whether it be new product deliveries or getting into different countries to sell their goods and bring in some additional revenues.”

Local examples abound, including:

n Manatee manufacturer Dulond Tool & Engineering, which went outside its primary industries — aviation, aerospace and marine — to produce marching band equipment carts. The company needed to offset an estimated 20 percent sales decline from 2008 to 2009. Owner Jeff Benson estimated the LoadMaestro carts, which will be sold to high school and college bands, will account for up to 20 percent of sales within the next few years.

n Stuart and Trudy Moon, who have owned and operated Air & Energy for 25 years providing plumbing and air conditioning services, introduced electrical services in January in an effort to give the Holmes Beach business room to grow.

n Ameritex Fabric Systems took its first step to find business outside the marine industry by landing a contract with Global Electric Motors to make canvas doors for its automobiles. Don Zirkelbach, president of Ameritex, said the manufacturer is looking to move about 25 percent of its business outside the marine industry.

“Today it’s extremely important that we do that,” Zirkelbach said.

The challenges are steep. Through the first three quarters of 2009, small business bankruptcy filings totaled 45,500 in the U.S., according to the Small Business Administration’s most recent statistics. That number has already surpassed the 43,500 small business bankruptcies filed in 2008, and is up from 28,300 filed in 2007.

But area businesses recognize they can no longer sit idle and wait for the economy to improve, said Kathy Baylis, chief executive officer for the Sarasota County Economic Development Corp. The Sarasota EDC will release a business climate survey on Wednesday showing 80 percent of local businesses made changes in the past year to their business model, by adding new products or services, cutting positions, reducing prices, closing branches, and increasing or decreasing advertising.

“Some of the challenges they’re still facing is financing,” Baylis said. “That’s a key piece for them to be able to do any expansion or grow.”

The SBA received $730 million from the American Recovery and Reinvestment Act, and its two most popular loan programs — 7a and 504 — doubled to 18,504 loans made in the second quarter of fiscal year 2010 from 9,238 in the second quarter of 2009. Nancy Rackear, spokeswoman for the Small Business Administration’s South Florida district, said the increase is a positive sign that business owners are reinvesting in their companies.

“Little by little we’re seeing these signs that the economy is coming back, and certainly our loan-bearing numbers are evident of that,” Rackear said.

“When things were at their worse, everyone was wondering when there was going to be a light at the end of the tunnel,” she added. “Now they’ve had a chance to calm down and think creatively and strategically about how they’re going to move through this.

“They realize while this may be tough, they’re going to survive.”

Beginning today and in the coming weeks, the Bradenton Herald will explore the creative ways local small businesses are not only surviving, but prospering. The series “Making Small Business Work” will highlight unique and innovative strategies being explored by companies in Manatee and Sarasota counties.

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