Printer-Friendly
Email this Story
Post a Comment (0)
Local business owners battle tough economy
When the national economy officially dipped into “recession” territory last month, the debate over semantics ended.
The economy became officially lousy and the only question after that was will America recover before “recession” turns into “depression”.
Nationally, unemployment numbers have rocketed up to 6.1 percent. A net of 533,000 people lost their jobs nation-wide in November.
Virginia, however, has been able to beat that trend though many local business owners have been feeling the hurt as residents spend less money on non-essential items.
“What we’re seeing in terms of talking to people is a lot of uncertainly,” said Jason Grant, the communications manager for the county’s department of economic development. Grant, who is also a co-owner of The Running Store in Gainesville, emphasized that in Prince William, issues with the economy should be viewed through a sector-by-sector prism. Some industries, like construction, have experienced a downturn while others, such as social services and data centers
Unemployment for September, the month the stock market began its swan dive, actually declined to 3.5 percent from the 3.9 percent figure it had one month prior, according to Economagic.com. It held steady for October.
However, there have been changes. Unemployment in Prince William was roughly a full point lower last year at this time than now. There has been “more cautious approach by businesses” happening now in the county, according to Grant. “As consumers have more uncertainty, they’re going to be less inclined to spend personal dollars.”
Small business owners like Kevin and Mimi Schlagel and can attest to that.
The Schlagels, who own the Daily Grind Coffeehouse and Café shop Mimi in the Heritage Hunt area of Gainesville, are weathering their second financial storm since opening up shop in 2006. Both times, extenuating factors put the situation out of his control.
When the extension of Heathcote Boulevard was repeatedly delayed by the residential development company Lennar, as it was part of a proffer package, so were the chances of Kevin Schlagel seeing an increase in walkup traffic. Morning commuters were supposed to be arriving from the Piedmont area directly north of the Town of Haymarket to his café during their morning drives toward U.S. 29 and Interstate 66.
“That road not being open has really set us back since day one,” he said.
Because his company was new and employed just a handful of people – which is up to six people today along with him and his wife – he lost upwards of $10,000 a month due to advertising and operating costs.
When the Heathcote extension was finally completed in the summer of 2007, business spiked 50 to 60 percent, Schlagel estimated last Saturday.
“Well, it was just a welcomed sight, seeing more and more people come in that we haven’t seen before,” said Schlagel, his thinning hair slicked back as his callous hands touch a can of Coca-Cola.
Things are different now. August 2007 marked a high point Daily Grind has not seen since.
“We’re hanging in there by the grace of God,” he said, eventually mentioning that he cannot afford to even buy newspaper advertisements.
As the housing market continued to evolve from a seller's to buyer’s market, Prince William still experienced positive growth, but slower growth. And the fewer people that move into the county, the less potential he has to attract new customers without an advertising budget.
Certainly, his business model is built around bringing in fresh audiences. The café’s open-mic nights and acoustic performances are some of the biggest nights for potential customers. Schlagel has concentrated expanding his company’s Internet presence with a 300-plus person e-mail list, a Myspace page listing what acts are coming up and a Facebook site too.
“As far as business goes, I don’t think we had actually felt the effects of the economy until last month,” said Schlagel, adding, “Last month, I think everyone just took a look at their financial situations and made [determinations].”
Fortunate for Schlagel, he has reason to hold out some hope for improvements in sales. December numbers are the “opposite of last month” in that they are increasing. He’s lowering prices on drinks and food to their 2007 levels and expects to land a catering gig with a nearby new company that will employ scores of lawyers right down the road as soon as it opens up shop in February.
Schlagel is not sure whether the next Heathcote extension completion will directly help his business as it will link Old Carolina Road to U.S. 15 south of the current OCR-15 intersection. But he reckons it certainly will not hurt.
Until then though, he said, “we’re operating on an almost day to day, month to month basis.”
When asked how his company can bounce back before new businesses come back and new roads are opened, Schlagel rhetorically repeated the question and stated whimsically, “Praying real hard for things to turn around.”
You must be logged in to post a comment.