Smart Entrepreneurs Make the Most of Recession's Opportunities
President Obama called this week for new tax incentives to stimulate small-business growth. Next week Congress is likely to take up the small-business jobs bill, which is intended to help businesses survive the recession.
But while many business owners will tell you times are tough, not everyone is struggling, thank you very much. There are small businesses thriving all across the country — not in spite of the recession but because of it.
BusinessNewsDaily spoke to a few business owners who’ve turned economic lemons into entrepreneurial lemonade, having started or grown businesses that are thriving during these tough economic times.
Outside the box
Chief Outsiders provides freelance chief marketing officers to companies that can’t afford to hire a CMO full time.
“I started the business because of the recession,” said Art Saxby, who co-founded his Austin, Texas, company in 2009. “I was out of work, and the companies that I could help the most could not afford me or were afraid to add an executive when they were unsure about where the economy was going.
"They needed what I could do for them, but they were either afraid or unable to hire me full time. But on a part-time basis, with the flexibility of a consultant that they could turn off easily, they could afford me.”
Client companies pay Chief Outsiders a monthly retainer, plus a performance bonus when the CMOs deliver results. Chief Outsiders keeps a portion of the retainer to cover company expenses such as marketing, PR, legal and accounting and pays the rest to its CMOs.
Chief Outsiders' year-to-date revenue is 2.4 times higher than its full-year 2009 revenue. Its monthly revenue is at a rate five times higher than its monthly average last year, Saxby said.
“I started Top Class Actions in late 2008,” said Scott Hardy, president of the Phoenix company that connects consumers to class-action lawsuits and settlements. “In this economy, consumers, now more than ever, are looking for ways to get cash. They can do this by claiming money due to them in class-action settlements.”
Most consumer settlements are claimed by less than 10 percent of the affected class, Hardy said. “We’re trying to increase that so that everyone who is eligible can get cash. That may be $20 to $100 for most settlements, but every year there’s typically at least one settlement which allows the consumer to claim hundreds or even thousands of dollars.”
The company, which makes its mone y by charging attorneys to advertise their lawsuits on its website, has doubled its revenues in 2010 and expects to do so again in 2011.
By the book
Collette H. Aurand has seen her bookkeeping service in Remsen, N.Y., some 50 miles east of Syracuse, grow by 29 percent in the third quarter of 2010.
“I provide bookkeeping services to small businesses,” Aurand said. “The third- quarter increase is mainly due to new business. Small-business owners are more concerned than ever as to what costs they have associated with running their business."
"Most of my new clients are the result of having had a business for a few years and either going for financing and discovering that their books are not in order, or paying the cost to have their CPAs try to straighten out their books at tax time," she added. "My services are much less than that of a CPA, and I try to work with my clients to help keep their cost down."
“We have seen a significant growth in both membership and revenue in the last two years because of the recession ,” said Catherine Cohen, who owns Phoenix-based Premier Barter with her husband.
For an annual membership fee of $49 and a 6 percent commission fee on each transaction, members of Premier Barter can trade products or services with other local users.
“Year over year our income has increased about 20 percent because businesses have time or products to trade so they can get things they need for business or themselves personally,” Cohen said.
“It makes sense for companies to join during a recession because, in the end, it saves a business money, and often we have helped businesses out of a bad situation because the business was able to barter for what they needed, conserving cash.”
“I was scared to death about my business when our town of 50,000 lost 5,000 jobs,” said Jeannie Bush, owner of Amenity Electrolysis in La Crosse, Wis. “We continue to lose jobs right and left, but I remain steady.”
Bush has found the recession is causing job seekers to first consider their appearance. “One of my best marketing techniques is in the local newspaper. In our area, it is the 45-year-olds that are fighting for jobs,” she said.
She advertises in the paper’s career section, and her ad explains how electrolysis can help with the interview process by making the applicant look younger, neater and better groomed.