For Local Small Businesses, A Lost Four Years
Owning a small business has never been easy. But local restaurateurs and and shop owners said they've seen little growth in business since 2007, and have given up predicting when things will turn around.
There have been days when Julie Upchurch has stood in the middle of her Gambrills flower shop and asked, “Why am I doing this?”
Five years ago, she never would have dreamed of posing such a question. She left her stable job as a corporate recruiter for a major transportation company and bought the Little House of Flowers, determined to make it as a small-business owner.
Business started fine, as she delighted in putting together fresh bouquets of locally-grown flowers and delivering them to moms, grandparents and lucky spouses.
Then the Great Recession hit, and business withered like an unwatered daisy. It has yet to rebound.
“The phones just stopped ringing,” she said of the fall of 2008, shortly after the collapse of the banking sector that triggered an economic freefall. “We went from somewhat busy to nothing.”
Upchurch, who is a blogger for Odenton Patch, is just one of many small-business owners in the area who said they are entering their fourth year of little to no growth. Many have streamlined their businesses by cutting hours and services. They’ve laid off workers. They’ve put personal finances at risk. And most have given up trying to predict when things will turn around.
“I don’t have a projection,” said Dan Lewis, owner of Odenton Ace Hardware in Odenton. “I’ve given up on that. This is kind of the norm. We’re going to stay flat or see very small percentages of increase from now on.”
James King, the owner of Kaufmann’s Tavern in Gambrills, remembers when there was good money to be made in the restaurant business. But he says he’s seen little growth in the business since 2007, while expenses have skyrocketed.
The cost of commodities such as milk, eggs and butter—essentials for any restaurant—have risen by 30 percent. His rent has gone up, along with gas prices.
King, who also runs a catering company and is a partner with the Rockfish Restaurant in Annapolis, employed 175 people four years ago. He now has 95.
Unemployment insurance now costs him $188 per year, per employee, up from $47 in 2007.
He said that while the restaurant business has benefitted a bit from busy families who have less time to cook, most people are eating out less due to the economy. He now no longer counts on business during the early part of the week and instead focuses on getting as much revenue as possible from Thursday to Saturday.
“You don’t need to go out to eat every night,” he said. “You don’t need to go out to a bar. So you cut those out.”
At the Little House of Flowers, Upchurch negotiated a helpful break on her rent and has re-tooled her business to focus on the basics: weddings and funerals. It’s a strategy that has kept the business afloat—people still get married and people still die, after all—but even local funeral parlors report less money being spent on services.
Unlike many fellow business owners, Upchurch carries no debt on the shop.
But she has yet to make a cent in personal income, and that wasn't part of the plan.
"There have been a few times where we’ve said ‘let’s just forget it. Let’s put it out of its misery,’” she said.
Lewis, meanwhile, said he is now ultra-careful in how he manages his inventory, constantly evaluating each product and whether it’s worth having on his shelves.
Already facing stiff competition from big-box home improvement stores, Lewis has heavily emphasized customer service and convenience. This year, he’s seen a modest increase in business, and he’s content with it.
“If it’s a one percent increase, we’re saying ‘yay!’” he said. “I talk with other business owners and we say that at the end of the day, if you made a dollar, you’re doing good.”
Taking a Chance
Anyone who has stopped into the Country Feed and Garden store in Gambrills also knows about the Covenant Cottage Gift Shop. For six years, Janet Garman ran the business with a partner, renting space from the feed store on Annapolis Road. But in recent years, the business struggled to turn a profit and Garman found herself spending more and more of her own money to keep it afloat.
Recently, however, Garman decided to make a change. She broke off from her former partner and teamed up formally with Chuck and Wendy Kinsey, the owners of Country Feed.
“I love this,” Garman said. “I love being in this community and getting to know your customers. That’s what feeds me.”
In October, the store will officially re-open as the Gambrills General Store. There will be new product offerings and the store will be redesigned with community space for book readings, lectures and clubs. There will also be a small area with items for sale to benefit Cheryl’s Rescue Ranch, a livestock rescue in Gambrills.
“If people aren’t coming in, you have to think about what you don’t have that might bring them in. You have to be willing to try,” she said.
Wendy Kinsey said she hopes the new partnership will benefit both stores. She, too, has seen business remain essentially flat over the last four years.
“The customers can’t afford to feed themselves, so they can’t afford to feed animals,” she said.
James King still has faith in the restaurant business. He’s opening three Greene Turtle franchises over the next few years, including one at the Village South at Waugh Chapel shopping center.
But he’s putting in 16-hour days, six days a week, and isn’t having nearly as much fun as he used to.
“There was a really good time when business thrived and it was a lot of money to be made, but it’s not like that anymore," he said. "There’s a new crop of business owner who’s coming in and saying, ‘wow, this ain’t easy.’”
A former state delegate, he remains an advocate for small-business owners, fighting for less regulation, lower taxes and bigger representation of small businesses in Annapolis. The West Anne Arundel County Chamber of Commerce honored him with its Small Business Advocate award last spring.
Recently, King worked with Upchurch, Garman and others to form Gambrills Crossroads, to help build a sense of partnership among businesses and to encourage local residents to shop locally. The group also organized the second annual Gambrills Fall Festival on Sept. 10, bringing hundreds of local residents to Kaufmann’s for a community event.
It has add added up to a lot of hard work for modest gain, and as the general economy continues to be a drag on business, there appears to be no positive news in sight.
“It’s been a lot more work and a lot less rewarding,” King said. “And that’s a recipe for disaster.”