AP revisits owners from recession years
NEW YORK — They are business survivors — owners whose small companies withstood the Great Recession that forced thousands of others out of business. Along the way, many had to lay off workers, forgo salaries or find new ways to earn money.
Ten years after the official start of the downturn, some entrepreneurs profiled by The Associated Press as the recession began say now that they are grateful but not gleeful; they have many painful memories and lessons learned.
“I have to say I’m ultraconservative now,” says Jen Miller, who told the AP in early 2008 she was feeling the impact of a weaker economy on her business that sells clothing, knickknacks and other items that companies give away to clients and customers.
Recent surveys of business owners show that many have the same cautious mindset. They’re careful about hiring, borrowing much money or taking other risks, because they’re mindful that another downturn could hit.
Labor Department figures illustrate the recession’s toll:
≤ Quarterly tallies show that the number of new companies peaked at 236,000 at the end of 2006 but then began falling, reaching 192,000 in the third quarter of 2009. The figure made it back to 237,000 in the first quarter of 2012.
≤ Business closings, in the 190,000 range until the start of 2006, peaked at 253,000 at the end of 2008 and didn’t return to pre-recession levels until the third quarter of 2011.
Miller avoided laying off her two staffers at Printing and Promotional Partners in Jacksonville, Florida, but says now, “there were times when I didn’t take a paycheck.” Miller ran her company cautiously and has been able to add an employee.
“I probably could add more staff, but I never want to be in a position to let someone go if things slack off,” she says.
A look at how other owners who were interviewed for AP stories from 2006 to 2008 have fared:
NOT ALL THE WAY BACK
By 2010, revenue at Beth McRae’s public relations company had fallen 80 percent from three years earlier. Fearing she would have to lay off her five employees, she urged them all to find jobs elsewhere. They did.
“It felt like the world was coming to an end. It was devastating to have a robust business bottom out like that,” says McRae, who’s based in Phoenix, an area particularly hard-hit by the housing market collapse that helped spawn the recession.
When McRae spoke with the AP in 2007, she had begun a routine of prayer, meditation and yoga to help ease her stress. She also used credit cards to pay her bills.
Revenue started creeping higher by early 2011 as clients who had slashed their marketing budgets felt safe enough to seek publicity again. McRae was able to hire one person that year. But business is still below where it was in 2007, and she has no further plans to hire.
“I’d have to see a lot of additional revenue come in the door before I’d do that,” she says.
IN THE MIDST OF THE HOUSING BUST
Jeremy Brandt was getting up every morning thinking about how to save his company — and whether to even try.
The housing market was already in trouble in 2006 and prices were falling. Brandt’s Dallas-based business linking real estate investors and home sellers was crashing.
“We lost 75 percent of our clients in a year. … We lost money for over 24 months,” says Brandt, the owner of the company then known as 1-800-CashOffer and now called We Buy Houses.
Brandt told the AP in October 2008 he was seeking advice from mentors and other business owners. That helped him stay in business, but eventually, Brandt had to cut his staff by three-quarters, laying off seven workers.
“You’re wondering, when do you pull the plug? Are you stupid to be rescuing a sinking ship?” he now says.
The business survived by shifting focus. With investors all but gone from the market, Brandt began working with real estate agents, charging referral fees for linking those representing buyers and sellers. He slowly built a new client base. And because so many other real estate companies had shut down, he had less competition. When the market began recovering, he had a head start on people who decided to give real estate a try again.
“I’m one of the people who has the battle scars and tells younger people how to get through every day,” Brandt says.