Economy forces small business to make big changes

The economy has taken its toll on
corporate America, wiping out jobs,
reducing revenues and in some
cases forcing giants, such as
General Motors Corp., into bankruptcy.
But Fortune 500 companies are
not the only ones hurting.
Many small, Black-owned businesses
are also dogged by the economy
and struggle every day to keep
their doors open.
Robert Shannon Sr., founder and
CEO of Bobcat Wood Refinishing,
is fighting to stay afloat amid
lenders scaling back on financing.
“I do what I can to stay alive in
this tight economy,” Shannon, 68,
said. “I started this business 39
years ago and I am not about to let it
die without a fight.”
Bobcat, 7745 S. Halsted St., provides
furniture-restoration to bedroom
sets, tables and chairs, as well
as damaged furniture.
With just two employees,
Shannon said he is survives by
keeping his overhead low.
“Yes I have to spend money on
supplies but I can purchase them
wholesale or even at a second hand
store, restore it and make it look like
new,” he said. “This is what I do. I
take old things and make them look
good again.”
As the CEO he often does not pay
himself to ensure he can meet payroll
and pay his contractors.
Networking has kept a steady
stream of customers walking
through the door.
“God has been good to me. I have
been in the right place at the right
time to meet people and tell them
about my business. And those same
people have gone back to tell others
about the fine work I do,” he added.
Before the economy went soar
Shannon would advertise heavily on
billboards all over the city especially
in impoverished, Black communities.
But even that has been scaled
back to reduce costs.
“Nowadays the bulk of my advertising
is word of mouth. It does not
get any better than that when you
are a small business,” said Shannon.
Restaurants are also suffering
from the economy as more people
are electing to eat at home rather
than eat out.
Since 1969 Dave's Red Hot, 3422
W. Roosevelt Road, has been a pillar
on the West Side with a customer
base that stretches all the way to
Alaska. The fast-food restaurant is
famous for its beef hot dogs and polish
sausages.
“We have customers from all
over. California, New York, you
name it,” said Eugenia Fountain, 35,
who manages the family-owned
establishment with her mother
Shirley. “Like any other cash businesses
we have been affected by the
economy. Weekly sales have dipped
by as much as 10 percent.”
But sales spike the first week of
the month.
“The first week of the month we
see a lot of business namely because
government checks are issued out
and people have a tendency to treat
themselves to food when they have
money,” Fountain explained.
To stay afloat Fountain said she
has had to reduce working hours for
the restaurants four employees, hire
a less expensive trash hauler and
stop selling bottled water because of
the city's sales tax on bottled water.
Other adjustments include reducing
the restaurant's weekly quantity
of supplies and picking up some
supplies instead of having them
delivered.
“It's cheaper to go to Jewel and
buy cases of pop than have them
delivered by a supplier,” Fountain
said.
Her dad, the late Eugene Gaines,
purchased the eatery, which seats up
to 20 customers, shortly after the
riots ended on the West Side following
the murder of civil rights leader
Martin Luther King Jr. in 1968.
But the biggest challenge for
Fountain has been financing.
“We purchased the land next door
to us with the hope of expanding but
we have not been able to get financing
to begin, so the land is sitting
idle,” she said.
Timothy Snow, a senior loan officer
for Bank of America, said businesses
could navigate the economy
by: knowing the local market and
lenders; seeking assistance from
government agencies-which typically
will have a certain agency designated
to help entrepreneurs and
small businesses; seeking more
asset-based loans when lines of
credit dry up; and looking for silent
partners willing to invest in the business.