recession

Small business boom in recession

emily_dreisbach — Sat, 02 Jan 2010 01:33:15 +0000

emily_dreisbach Fri, 01/01/2010 - 5:33pm

Sustainable on Market Street is one of several new recession-friendly businesses to open in Ballard during the current economic downturn.

Michael Harthorne

Conventional wisdom leads us to pity the person who chooses to open a business in the midst of the current recession, but there are small retailers who thrive in a risky economic climate — traditionally bars, repair shops, education and other services where demand increases as general societal thrift grows.

Ballard has its own collection of businesses that have opened in recent months, well into the current economic downturn.

Sustainable, which sells furniture and home décor imported from southeast Asia, opened three weeks ago at 20th Avenue Northwest and Market Street.

Owner Wanna Keawnapaporn said she chose Ballard as the location for her new business because the neighborhood is both artsy and sustainability-focused.

Keawnapaporn, who is an interior designer, opened the store with the hope that the economy is improving.

She reasoned that when money is tight, customers will choose to buy pre-made furniture rather than design their own and a store like Sustainable would fare better than a custom-designed furniture business.

Business has been good in the past three weeks, and Keawnapaporn said she attributes this mainly to the holiday season. She has done better than expected, but said she believes business will slow a little after the New Year.

Sound Gold Buyers, located at 8008 15th Ave. N.W., purchases unwanted gold, silver, platinum and diamonds for cash.

The business opened a six weeks ago, and owner Ben Robbins said business is doing well.

Robbins said he opened in part because he knew people need money in the recession, and because gold is currently at record prices.

Though options for sending gold in the mail to establishments that reimburse with cash exist, Robbins said his store is more reliable because the customer interaction is in-person and the scale used to weigh precious metals is calibrated by the City of Seattle.

Robbins chose 15th Avenue as the store location because of its good visibility and proximity to I-5, but he said he has a good amount of customers from Ballard and personally loves the neighborhood.

In addition to being a good option for extra cash, Sound Gold Buyers considers themselves a sustainable business because everything they buy is recycled into jewelry, industrial and investment industries, preventing further unnecessary mining of precious metals.

MovieCycle, located at 2240 N.W. Market St., opened in September. The store buys, sells and trades used DVDs, VHS, blueray and video games.

The owner operates several video rental stores on the Eastside and tested the model in the other locations before opening a store devoted solely to secondhand merchandise.

Movie Cycle manager Jeremy Keyes said the rental business is slow for everyone, but they are doing well.

Keyes said MovieCycle considers itself to be a sustainable business and they advertise in the Seattle Weekly as part of the “green card program.”

He said he sees businesses like MovieCycle as the future of movie viewing, and predicted that people will increasingly choose to buy movies for about the same price that rentals cost.

MovieCycle is always looking to buy DVDs and VHS, and sellers receive about $1 to $2 per movie, sometimes little more for high-demand material. DVDs can cost as low as $2.99 and average $6.99.

Buffalo Exchange, which has operated stores around the nation since 1974, opened in Ballard six months ago.

Manager Geeta Sood said getting the name out was difficult at first, but business has been very good.

She said the company was not nervous about opening another store in the recession because they knew how the business operated and that it would thrive in an economic downturn.

The Ballard Buffalo Exchange is half the size of the store in the University District, and Sood said part of the location’s success is due to the fact that people who live in Ballard are loyal to the neighborhood.

City will see multi-million dollar drop in revenue

Guest — Mon, 06 Apr 2009 19:53:36 +0000

Guest (not verified) Mon, 04/06/2009 - 12:53pm

A new revenue forecast for the city reflects the nation’s worsening economy, projecting $29.5 million less revenue in the city’s general fund for 2009, compared to last year’s forecast, a 3.7 percent drop.

“We have anticipated that revenues would be down and this latest forecast confirms the size of the problem," said Mayor Greg Nickels in a release issued today. "As we make difficult budget cuts, I will continue to put a priority on maintaining funding for public safety and direct human services."

The latest forecast revises estimates made in November 2008, adjusting for what has become a major recession nationwide and a severe regional downturn. Led by a decline in revenue from sales taxes and business and occupation taxes, the revised forecast for 2009 represents a 3.7 percent drop, according to the mayor's office.

This month, the mayor will consult with city council members on cuts that can be implemented beginning in May to bring the 2009 budget into balance. In anticipation of the lower revenue forecast, in February the mayor directed city departments to identify potential 2009 general fund reductions of up to 3 percent.

Nickels also ordered the freezing or rolling back to 2008 levels the salaries of more than 100 senior city
executives, and that four executive offices institute furloughs for their employees.

When the council adopted the 2009 budget last fall, it also endorsed the 2010 budget (the second year of the biennium). The mayor will present a proposed 2010 budget to the council in September.

Today’s revenue forecast estimates that in 2010, general fund revenue will be $41 million less than previously forecast. As a result, the mayor is starting the 2010 budget process earlier than usual to identify further reductions.

In addition to a drop in general fund revenue, the forecast for Real Estate Excise Tax (REET) is down $11 million for 2009. A substantial slowdown in commercial and residential real estate sales will require the city to delay REET-funded capital projects.

Common Cents: How to invest during a recession

Guest — Fri, 27 Mar 2009 21:29:55 +0000

Guest (not verified) Fri, 03/27/2009 - 2:29pm

We are now finishing the 16th month of the recession, which began in December 2007, according to the National Bureau of Economic Research. Not only is this a long recession, but it’s also a severe one, marked by painfully high levels of job losses, a sharply reduced credit flow and a drop in the value of many investments.

Still, despite all the bad news, there are valid reasons to believe that brighter days lie ahead. But you don’t have to wait for things to turn around before taking steps to help your own financial future.

Here are some actions to consider:

Don’t cut back on your 401(k).
During difficult economic times, it’s hard for many people to assume their jobs are safe. But if you are fairly confident your employment situation is secure, continue investing in your 401(k) or other employer-sponsored retirement plan. The tax advantages of these types of plans — not to mention the employer’s match, if one is offered— make them ideal savings vehicles for retirement. Of course, your plan probably has taken a hit over the past year, but that’s the case for many investments. If you’ve chosen a good mix of investments, your plan should recover at some point.

Diversify, diversify, diversify.
Generally speaking, it’s not a good idea to tie up more than 5 percent of your portfolio in a single investment. Spread your investment dollars among a wide range of stocks, bonds, certificates of deposit and other securities. For a rough idea on how well you’ve diversified, ask yourself: “If the value of a few of my stocks and bonds declined and didn’t recover, would it be extremely painful for me financially?” If the answer is “yes,” you probably need more diversification. Of course, diversification by itself cannot guarantee a profit or protect against loss, but it can give you more chances for success and reduce the effects of volatility on your portfolio.

Think long term.
Your investments may have lost 30 percent to 40 percent of their value from October 2007 to the present — which may seem like a long time. Yet quality investments often need much longer periods to show significant growth. So while it can be painful to endure short-term losses, you need to develop the discipline to hold your investments for many years.

Don’t reach for high yields.
When the stock market is down, many investors turn to bonds that offer high yields, reasoning that bonds are always safer than stocks. Don’t be fooled into this line of thinking; high-yield bonds mean high-risk bonds. If the issuer defaults, you could lose your principal. Stick with investment-grade bonds.

Look for opportunities.
Instead of avoiding the financial markets, look for good investment opportunities. Because investment prices have fallen so much, your dollars can now buy more shares. Historically, buying shares at lower prices has often led to higher returns over the long term. If you’re receiving dividends, now is an especially good time to reinvest them.

You probably can’t avoid all the negative effects of the recession. But by following the above suggestions, you can help avoid getting thrown off track on your journey toward your financial goals.

Jon Gerhardt is a financial adviser for Edward Jones in West Seattle, 7354 35th Ave. S.W. He can be reached at Jon.Gerhardt@edwardjones.com 938-1718.