When the going got tough, these enthusiastic businesses got going
Published 07/03/2010 | 05:00
Small businesses, according to US President Barack Obama, are the chief creators of new jobs in a struggling economy. Last week, he asked the US Congress to temporarily expand two lending programmes for small business owners to bolster the economy and get people working.
Here, there is no sign of a meaningful stimulus package and the credit squeeze continues to strangle small business owners, entrepreneurs and innovators.
The toughest trading conditions in two decades have led to five companies going out of business every day in February.
Behind those bleak statistics lies a very human story of broken dreams, and of years of hard work all coming to nought. But some businesses -- even in the hardest hit sectors of retail, hospitality and services -- are bucking the trend.
It has not been without struggle but there is hope out there -- especially for those who kept their feet on the ground during the good times.
The three businesses profiled here all invested prudently and moved quickly when the downturn came. Nor were they reliant on the easy-come, easy-go cash from the corporate sector.
They strengthened their businesses by building up a loyal customer base with an emphasis on good value for money for a premium product.
So far it has worked, and all report that the first three months of 2010 have been encouraging.
NUALA WOULFE, BEAUTY THERAPIST
Beauty therapist Nuala Woulfe has been in the business for 16 years.
As well as her long-established beauty salon, she made a major investment six years ago with the development of her Serenity Day Spa.
She admits it is a tough business environment, simply because people have become more careful about spending money, but she has benefited from a new wave of customers since January who feel stressed out and in need of revitalisation.
"We have 22 staff at the moment between the salon and the Serenity Day Spa, [both on Glasthule Road in Sandycove, Dublin] and I am glad to say we have not lost any and that's important because they are all highly trained in their fields and we are lucky to have them.
"We have also been lucky in that we have long-term clients who have been extremely supportive.
"We basically work on the principle of offering a really high-class service. People who are stressed can come in and get the very best massage available and [in] these times that has become a significant side of the business.
"We have massage therapists who offer a huge variety of massage, Thai, lomi-lomi, etcetera, and we will customise treatments to the client's needs. I invest a lot of money in training staff and it's been very worthwhile for me and the business."
Nuala made the major investment in creating the day spa six years ago before building and set-up costs became sky-high. So far so good. But it's no use saying otherwise: times are tough. Anyone who says that business has not been hit by the downturn is not being 100 per cent honest.
"We were really fortunate in that I didn't feel any impact from the recession until July or August of last year. That was the change. You could feel that people suddenly became aware of what they were spending, of getting value for money. From a personal perspective, after listening to other people in business, I feel that we have been very fortunate.
"Since January things have been pretty good. We are down on the same period last year, but we are busy.
"We have been proactive in doing new things which will excite clients, things like taster treatments where people can come in and have a curtailed treatment at a significantly reduced price.
"It means that they can try a treatment and see if they like it. It has worked," said Ms Woulfe.
High-class dining has always been one of the first casualties of recession as business diners trim back expense accounts.
This recession has already led to the closure of some of the country's best restaurants, such as Dylan McGrath's Mint in Ranelagh on Dublin's southside. But on the northside, Michelin-starred Chapter One continues to thrive.
Chapter One was opened in February 1992 by Ross Lewis and Martin Corbett in the basement of the Dublin Writers Museum on Parnell Square in Dublin's city centre.
According to Martin Corbett, 18 years' experience in the business has proved vital.
"We are very, very happy with business at the moment but we are working very hard at it as we have for nearly two decades. We try to provide an honest product and good value to the customer and it is working. The recession has presented challenges, and the trick is to offer value for money. That has been our strength, and it has paid off big time. We never went too mad pricewise when we got our Michelin star. We kept our feet on the ground, and, by God, that has paid dividends. I hope that doesn't sound complacent, because you can't be.
"We are working harder than ever because we know it's much more competitive out there. We are holding on to our customers. It sounds like a cliche but the important thing is looking after the customer -- putting them first.
"We currently have 40 people on the payroll -- all full-time. When January came around I have to say we were worried. We came back in the new year thinking this is going to be tough. We are very, very surprised at the trade we are getting. We are keeping our heads down and just getting on with it but we are pleased.
"We are lucky here in our location. There are two professions which have always kept restaurants going in a recession -- the law and medicine. Right beside us we have the Mater Hospital, the Rotunda and Temple Street and the Four Courts just up the road. And the Gate Theatre has been fantastic for us. We do a pre-theatre menu from 6pm which is always booked out. I have to pay tribute to Michael Colgan. He has done wonders for the area in that respect," said Martin Corbett.
Kate Gleeson, Diffusion
Swift action when the downturn came saved Kate Glesson and her Diffusion boutique in Clontarf but the recession has not been without pain.
"Letting someone go was one of the hardest things I have ever had to do. It took me a while to get over it," she says.
En route to Paris to conclude buying for next winter's collection, she now looks back and believes that constant monitoring of the business on an almost daily basis helped her adjust quickly and effectively when the downturn hit almost overnight.
"Last year was very difficult. Business changed so quickly. I made changes rapidly and you really had to be on the ball. Thankfully this year has been really good. Last year I nearly threw in the towel, but I am so glad now that I didn't. I watch my figures like a hawk and I saw the change at the end of 2008. First they levelled off. But when it started to decline, slowly at first, I immediately decided to buy less. That was the starting point. For this business, it is all about stock, looking at what I have, what I need and what I have sold. I have a very good POS [point of sale] computer system that told me my sell-through on each collection and that was vital for my survival. If I was to wait until the end of the year for my accountant to tell me how I was doing and what I should do next year it would have been too late. It would have been all over.
"On a weekly basis I could print out each collection to see what had sold, how they were performing. That meant when I went away to buy that designer again for the following season I would know that I had, say, only sold 60 per cent of that collection and I would change my buying to take that into account.
"I had to have my business head on which is hard, because for me it is all about passion for clothes. I had to look at staffing. I haven't had to make a lot of reductions there but there was a reduction and I have to say it affected me very badly. Now the staff I have are the backbone of the business -- Vera has been with me as manager for 14 years, and it's people like that who hold the fort while I'm away.
"Women are not buying as many pieces but they have not dropped their standards in terms of quality. They are more aware about the money they are spending and they want good value. We have always thrived because we are offering fashion which is edgy and contemporary and of the moment, labels like High, M&F Girbaud, Shumacher and D&G," Ms Gleeson added.
Carol Hunt, Page 17