Thursday, 29 of July of 2010

Cautious Plans to Expand After a Grueling Year

Chris Wrightsman and his business partner, John LaRocca, wondered if they’d have to strap on their tool belts and go back into the field after 15 years in management. Bruce Rigney worried about losing his family-owned company. Sean O’Neill questioned his decision to start a home-based consulting firm in 2008.

As it was for so many, 2009 was a rough year for these three entrepreneurs. But with the dawn of 2010, all are optimistic that they have survived the worst. They are ready to begin growing again.

Several surveys of entrepreneurs show that confidence about 2010 appears to be growing, albeit cautiously. The Discover (DFS) Small Business Watch, a monthly index of companies with less than five employees, showed that fewer micropreneurs surveyed in December felt that the economy was getting worse, compared to November’s numbers. And 22%—an increase from 19% in November—said they expect business to pick up in the next six months. The monthly Small Business Scorecard survey done by SurePayroll, an online payroll services provider, last month showed an even bigger improvement: Two-thirds of small business owners surveyed reported that they expect their revenues to increase in 2010. The survey also showed that hiring at small companies was up 3.4% for 2009, with more entrepreneurs hiring new employees in December rather than bringing on contract workers.

“I’m looking forward to 2010. I think it’s going to be a good year for us,” Wrightsman says. His assessment is a far cry from a year ago, when LaRocca Inspection Associates was struggling to stay afloat. The property inspection service, based in Sunland, Calif., began feeling the pinch in mid-2008, when the California real estate market crashed. “No one was buying homes, no one could get loans, and one-third of our business just dropped off the map,” recalls Wrightsman, who is CEO.

He laid off 20% of the firm’s inspectors and 30% of its administrative employees, bringing the company, founded in 1994, down to 32 employees.

After a best-ever year, near-collapse

“The thought always crosses your mind as a business owner: Will we lose the company? I inspected for several decades and so did my business partner. We wondered if we’d have to go back into the field and do inspections ourselves,” Wrightsman says.

That kind of worst-case scenario also occurred to Rigney, who founded Rigney Graphics, at his dining room table 28 years ago and plans to pass it down to his son and three grandsons. “I figured I would lose the whole business. We were scraping together money for rent,” Rigney says.

The downturn was something of a shock, he says, because 2008, when he had $910,000 in revenue, was his best year ever. “We thought we were impervious because normally, in a mild recession, our clients promote more and we pick up some higher-end clients looking for bargains,” Rigney says. “In January, I started to feel the fear and anticipation of horrible things happening in the future,” he says. But with plenty of big clients and lots of work, he didn’t worry too much.

In 2009, however, his big clients shut down, deciding to stop producing newsletters, product sheets, and advertising that they had ordered steadily in the past. Other companies took their graphics needs in-house to save money.

In April, a combination of circumstances hit the company hard. “I got quite ill and was out for the better part of two months,” Rigney recalls. During his absence, employees focused on a planned office move.

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