Small businesses continue weathering the economy

Small businesses continue weathering the economy

Like most small business owners, Maria Cartage and her husband, Christopher, started their home remodeling company with great optimism and just themselves as employees. But they did so in 2007, just as the housing bubble burst.

Ironically, Cartage says, the economic downturn "was probably the best thing that happened to us" because as a nimble startup they were in a position to adapt to the changing times. Quickly modifying their business plan, the couple focused on the much-needed home maintenance and repairs first. As their clients' finances improved, the Cartages could sell bigger remodeling projects. “We feel blessed to have been able to maintain our pricing the same throughout the past five years," Cartage says, "and see a steady growth because we are meeting the needs of everyday homeowners.”

With that growth, the couple has hired three additional workers with plans to add four more by the start of 2013. Though their company has seen a steady flow throughout the year, Cartage says, they also saw a spike in business in the past month. The licensed general contractor specializes in interior home remodeling projects for kitchens, bathrooms and basements and smaller handyman projects, and the company maintains solid relationships with its subcontractor force of electricians, plumbers and HVAC specialists.

A winner of Angie’s List 2011 Super Service Award, Cartage Home Remodelers operates out of Northlake, Ill., a neighborhood just south of Chicago’s busy O’Hare International Airport. “We have the entire spectrum from struggling to financially set,” Cartage observes. In their daily interaction with homeowners in the region, the Cartages remain upbeat and optimistic. “At least in our experience, Chicago is steady and growing,” she says. “We see a renewed confidence in the Midwest.”

The remodeling company was among hundreds who participated in a recent Angie's List survey about the economy. Slightly more than half of those responding say business has improved at their own companies.

As a group, service providers on Angie's List may represent a particularly significant microcosm of the national economy because most are small businesses. According the U.S. Small Business Administration, small businesses "represent 99.7 percent of all employer firms, employ half of all private sector employees and have generated 65 percent of net new jobs over the past 17 years."  As small businesses, these plumbers, doctors and other service providers feel the changing economic winds more directly and immediately than most salaried workers.

Cleaning up in Birmingham

In 2011, Cynthia Sloan took over ownership of Maid to Order for You, a top-rated house cleaning business in Birmingham, Ala. “It’s really kind of an odd story,” she explains. Sloan’s friend started the company in 1995 and died suddenly a few years ago. Her friend’s family asked her to manage the business, so they could sell it.

“It was in pretty bad shape when I took it over," Sloan says. “Part of the decline in the business when I took it over was due to the economy, but some of it had to do with the previous owner and her particular situation that was beyond her control. The business had just kind of slipped.”

Sloan was able to keep her regular job for about two years, relying on an office manager to schedule the cleaning teams. “It gave me the luxury of funneling all the money back into the business to get good personnel, get the vehicles up to standard and get some decent equipment for them to use.”

Recently, an associate loaned her the money to buy the company, and she’s been working at Maid to Order for You for about four months. “Once I took control, it started taking off because I stopped turning down jobs.”

The company had ten employees when Sloan first took over, which she’s increased to 18. “I’ve grown from three teams to five,” she says. “I’m actually positioned to put a sixth team in the field; but I’m just waiting to see what kind of drop-off we have after the holidays.”

For Sloan, the holiday season can get especially busy. “We are really super jammed up,” the Birmingham businesswoman reports. “We get clients who call us just a couple times a year during the holidays when they host parties and things like that. But we’re getting a lot of new, recurring clients as well.” Her dedication to the service of her customers has paid off with an Angie’s List 2011 Super Service Award.

While Sloan’s business is taking off, she sees a mixed bag with regard to how her clients are faring economically. “I have some clients who I haven’t serviced for a year call me and say they’re ready to come back on,” she says. “Then I’m having some clients who tell me it’s just a little bit tough for them and they’re going to have to lay off for a while. So it’s kind of hard to tell.”

Sloan observes that Birmingham’s economy is tied to the nationally ranked hospitals and the University of Alabama at Birmingham. With the summer’s uncertainty surrounding the Affordable Care Act and the Presidential Election, she said that “the hospitals laid off a whole bunch of people there for a little while, but now even the university hospital is hiring people back now.” She sees skilled labor still struggling in her area.

Feeling OK in Oklahoma

Shane Jenkins is the sole employee of his Edmond, Okla., business, Shane's Handyman Service. “I’d have one extra employee if I could con my wife into it,” he jokes.

Jenkins tackles a variety of projects like painting, installing drywall and electrical work. “Work is really pretty steady,” Jenkins reports, “but it’s kind of slowed down. During the summer, it was from four to six weeks lead time. Currently I’m like two to three.” After the holiday, he predicts his orders will really slow down. “January and February is usually the only slow time,” he says, “so I’ll only have to work three days a week instead of all five to stay up with everything.”

Jenkins reports that his personal income has remained about the same as a year ago, within a few thousand dollars. As for the residences Jenkins services in the northern suburbs of Oklahoma City, he notes most of the local economy as being driven by oil and gas production, which has mostly fueled consistent employment. Oklahoma’s seasonally adjusted unemployment rate held steady at 5.3 percent.

Asked about what the economy might look like a year from now, Jenkins says, “I’m hoping it will be better. I know it’s not a great marketing strategy, and it’s not how you run a business, but you have to have hope.”

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