What 2010 Meant for Small Businesses in Reisterstown

People are the lifeblood of a community, and businesses are made up of people, often within the community. So, community and business are forever intertwined. To that end, each week, Reisterstown Patch will cover some aspect of business life as it affects our community in this new weekly column: On the Record with Reisterstown Business.

If you're opening a business, if your business has teamed up with a charity or if you just have some success you want to talk about, I want to know about it so we can share it with our neighbors. This week I'm taking a look at a few of the major business issues and trends of 2010 and see how we rate according to the national view.

Luxury versus Discount Items

An October 2010 article by USA Today said that while in 2010 Americans curtailed spending on traditionally essential items such as food and dental care, they started purchasing more luxury items such as electronics, jewelry and pet supplies.

As a brand, Porsche defines luxury. Logic would dictate that when people are struggling to pay daycare bills, they probably aren't thinking about spending money on the care or purchase of a Porsche. If you believe the USA Today article on 2010 consumer spending, however, the opposite is true.

I spoke with Ralph Simmers, owner of on Owings Mills Blvd. Ralph's repairs Porches, so he knows a bit about how luxury item sales are affected during down economic times. In a good year, he said, business usually came to a grinding halt in September because for most of his customers, the Porsche is the third car in the family, meaning it's generally kept in the garage and out of mind.

"In September parents are having kids go back to school and the schools want the money up front," he said. "They may have to lay out $100,000 in that month so they're not wanting to put out $500 to a couple of thousand to repair a car that's basically the third car in the house."

Beyond what he has seen normally over the years, Simmers said sales had been declining, reflecting the falling economy with the last few years bringing in less money than in years past. As the USA Today article suggested, however, for 2010 sales were on the upswing for luxury items, even during the normally-slow month of September.

That sounds like a good thing, and generally it is, but it's still not as rosy as it sounds, according to Simmers. Increased sales aren't translating to more money in Simmers's pocket. "The problem I'm having now is collections," he explained. In fact, for the first time, he's had to start asking for a down payment often before he agrees to work on a car.

It's a bit of a trickle-down effect said Simmers. In one case, a repeat customer brought in his Porsche, then failed to pick it up. Simmers has called the customer often, and initially heard that the man would be by to pick up the car and pay for it "in a week or so." Now, said Simmers, the customer isn't answering his phone. Simmers believes it's the result of the customer's own, once-successful business running into financial problems.

Reinventing the Business

Americans are great at reinventing themselves and rising to the occasion when facing a difficult time. Drab sales for 2009 brought Reisterstown entrepreneurs to life. They realized the same old stuff wouldn't work during a trying economy, so during 2010 they had to make deeper cuts to costs, and they learned to use some inventive marketing measures to survive until the economy picked up.

They dug deep and waxed creative, coming up with the equivalent of the business "Victory Garden," which sustained people during the Great Depression.

Lauretta Nagel, owner of on Main Street used a mighty big shovel when she started unearthing ways to cut expenses in 2010.

"I cut way, way, WAY back on expenses, slashing my hours back on Friday and Saturday nights when people are less likely to stop in, reorganizing the catering for first Friday wine tastings so they cost less, and printing events bookmarks instead of newsletters," she said.

Even though she has a job, Nagel knows first hand about the unemployment woes that continued to plague Maryland and the nation in 2010.

"I did not re-hire staff as they left [so it was usually just Nagel alone in the shop]. Maryland's Unemployment Contribution tripled this year, and I just couldn't justify hiring anyone with such low sales numbers to offset it."

Stressing Your Strengths

In 2010, Reisterstown small businesses realized the need to set themselves apart from the competition in a way they hadn't had to do in a long time. For some, it was a matter of enhancing existing programs.

For Nagel, the beauty of an independent bookstore has been in being able to offer special programs and become part of the community. She just stepped it up a notch in 2010. It was no longer a add-on for her business, but rather an integral part of what makes her business work in the community.

"Events help a great deal," said Nagel. "Amazon cannot host a local author. Sometimes Barnes & Noble cannot even host them because they are with a small press and the corporate rules don't allow it."

Constellation Books can do it, however.

"I also like to host music events and community-centered meetings, like the recent farmers market organizational meeting," she said. "I'm hoping to add a poetry slam in the coming year. I think the local universities and high schools might enjoy that."

Going Mobile

Another national trend in 2010 was increased mobility, though generally it relates to the fact that in 2010 businesses became more mobile themselves. In the case of Constellation Books, it was more a matter of further embracing technology that mobile consumers want.

Nagel has sold e-books via her website, but found many of the formats limited. She partnered up with IndieBound bookstores and Google Books to give consumers what they want: the ability to become even more mobile.

"It's very cool,you can read the book on your computer, then log off and go about your errands," she explained. "Then, while you're waiting in line, bring up the book on your cell phone and it remembers where you were in your book."

Stepping Outside the Comfort Zone

Ralph Simmers launched a website at a time when other business owners pulled back to cut costs. The result? New business. Simmers deals with a specialized product, Porsches, so someone who has spent money on such an expensive item would want to hook up with someone equipped to repair that machine.  

According to Simmers, in years past he could close his doors in September as business slowed down. With the influx of new business, he not only held his own in September 2010, but turned a profit.

Throughout 2010, the theme with Reisterstown business seemed to be getting back to basics and strengths of the original business idea, then embracing new marketing plans and technology to draw in new customers. Despite a lagging economy, an entrepreneur will do what he does best: come up with a plan and make it work. So, the 2010 business year in review for Reisterstown was all about embracing one's inner chameleon.

For next week, I want to hear about your business resolutions for 2011. What are you willing to do for your business to make it a great year? Please email me with your ideas. I want to include as many businesses as possible.