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Ringing phones: a sign of small business recovery
by Joyce M. Rosenberg, Associated Press
Aug 12, 2009 | 813 views | 0 0 comments | 7 7 recommendations | email to a friend | print
NEW YORK — At one small company, the phone is ringing more often, while another is getting business again from retailers who canceled orders last year. And at an inn, reservations are coming in for the busy season.

These are some of the signs of a turnaround that small businesses are starting to see. As economic reports look brighter and the stock market rebounds, some owners are finding that customers and clients are willing to do business again.

At Juniper Hill Inn in Windsor, Vt., "people are starting to call in daily," owner Robert Dean said.

The 16-room inn was busy at the end of last year, but Dean was also getting fewer advance bookings. His customers generally weren't affected by the economy, but they were uncertain and therefore thinking, "we need to hold back a bit."

They're still cautious. October is the busiest time of the year for innkeepers in Vermont and normally Juniper Hill Inn is 85 percent booked by early August. This year, it was 40 percent booked.

But, Dean said, last week he booked three rooms for October in one day.

He attributed the change to better news about the economy and the stock market. But he's still seeing caution — people don't want to book for the fall unless they're convinced the foliage is going to be worth seeing. So they're making their reservations much closer to the time that they're planning to spend in Vermont.

Some business owners peg the first signs of recovery to events, like the election and inauguration of President Barack Obama. For a turnaround to become more widespread, and more certain, problem areas in the economy like unemployment and consumer spending, will also have to show signs of recovery.

Laura McHolm, co-founder of NorthStar Moving Corp., a Chatsworth, Calif.-based company, said "the phone pretty much started ringing after November," when Obama was elected.

"People felt like something was getting done" to help the economy, she said.

McHolm described those callers as "early shoppers" who were looking for information. Business picked up for real along with home sales in the spring and summer, and McHolm said the second weekend in August was "gangbusters."

"We are definitely better than we were last summer," she said.

NorthStar, along with other movers, suffered as the housing slump persisted. The company handles moves that originate in California, and McHolm said that although its more upscale business was solid, it lost business as middle-class homeowners postponed home purchases and stayed put.

Other firms are doing a little better because their customers, after more than a year of cutting back, are ready to take on more work.

Agnes Huff's public relations firm started feeling the effects of the recession in the middle of 2008.

"It started with one client saying (they) didn't have the money to continue with PR," said Huff, president of Los Angeles-based Agnes Huff Communications Group. It also got harder to replace clients who left.

Business was down between 30 percent and 35 percent. "They weren't even inquiring," Huff said.

The first signs of a change came six to eight weeks ago, when several prospects called to inquire about working with Huff's company, and one became a client. Another company was very interested, but ultimately decided to work with a different kind of agency. It was a close call, but gave Huff's cautious optimism a boost.

"We're hoping to see a pickup toward the end of the year, when their budgets are being formulated," she said, referring to prospective clients.

At some small businesses that have struggled through the recession, the signs of a rebound, while still very early, are reassuringly strong.

Robbie Adrian, an organic baby blanket maker, was launched in July 2007 and had an incredible run, co-owner Susan Doris said. Then, when the credit crisis began in September 2008 and the stock market began crashing, retailers stopped ordering and sales dropped off between 40 percent and 50 percent from a year earlier.

The company kept its Internet business running, but Doris and her partner, Robbie Mahlman, both took on other work to pay the bills. Before last September, the company was getting 70 percent of its business from retailers and 30 percent online; after the financial crisis began, that split became 20 percent and 80 percent.

But in the past few weeks, retailers have been calling, and business in August is up 300 percent from July.

"We're seeing orders coming in at a rate we haven't seen in six months," Doris said. "We're just seeing the beginning of life again."
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