How has the economy affected your area?

I run a small business which I purchased almost 4 years ago. In the four years since, I have worked and invested all I have into growing the business, this year to maintain that level of sales, I have found that I have had to sell at a tighter and tighter margin, and then starting in September we hit a wall. While we are keeping the doors open and the lights on, it's become a challenge. The cash reserves are gone and like most of America, we're just getting by. But we are getting by and I'm grateful for that.

Over the weekend I went into Manchester CT with my wife because she needed some fabric. The Jo'ann's fabric store she was going to is in a large strip mall next to one of the larger shopping malls in the state. In the strip mall, there were at least 5 vacant store fronts that had been filled last time I was there (about 3 months ago) and on the street corners by the large shopping mall there were folks holding up "going out of business, XX% off all merchandise" signs for at least 3 or 4 more stores. It was a real eye opener.

So we have discussed to death the big picture and what is happening in Washington and the stock market and in the big corporations. But how is the economy affecting your area of the country and what are you doing personally to deal with it? I guess it's that over used Wall Street vs. Main Street question but I am curious.

Ps: Please leave the political angle out of it so we can have this discussion without hitting the Doghouse.

Things have slowed down here a little, but I haven't noticed any increase in stores going out of business. Wyoming is rich in coal and natural gas, which helps as long as people still need heat and energy and can pay for it. I'm also in a university town, which means that as long as the state has money to keep the university going things should be all right. Where I've noticed it the most is in the organizations that help those who have next to nothing. Donations to the local soup kitchen are down and they are struggling. The free clinic is feeling the pinch. Those of us with a little more cushion are still OK so far.

We are located in a state capital, so things are not real bad, but one can see evidence of belt tightening. We have had several stores close, including a brand new Starbucks (probably because of McDonalds cutting into their sales).

But all of us are sufferering to the point that retirement may not be possible.

The supporters of the global economy said the United States would be a leader in the global financial industry. I looks like Wall Street was just a leader in a series of fradulent finacial schemes that we will pay for the rest of our lives. What we should learn from this is that we cannot put all of our eggs in a single basket. Corporations are getting too large. These megabusinesses are destroying the American dream. Small businesses get the leftovers or worst, table scraps.

The changes are subtle. I'm going to buy a new car in January, so I have taken notice of dealerships in my area. Inventories are way up. I've noticed a lot of cars available that used to be hard to get. And this Christmas should tell us a lot after its over. I'll be watching the news for statistics from this coming Friday. We're spending Thanksgiving in Tennessee and the local news reported a 50% increase in the number of people coming to get the free Thanksgiving family dinner boxes. Its little signs like this that I'm noticing more and more.

Hey Steve,

There's one thing I can assure you.. The government will not be extending a bailout solution to us like they are doing for financial institutions and I presume eventually the auto industry...

This is our bread and butter time of the year, so I can't tell if there is a difference yet.. Clients are doing a little less but we have more of them it seems..I'm worried about April and beyond...

put on a happy face

I'm a professional actor. ( my cast-mates would say semi-professional) Successful shows are closing on Broadway, and only the huge hits can remain afloat. They're ok for the moment, but there's no advance. At all. Ad agencies are losing accounts which will translate into fewer jobs for voice-over and on-camera actors. Some of what work there is, now goes to non-union actors. (no Pension and health etc) New shows are having trouble raising initial investments. Many shows employ 50 - 100 other people besides actors; carpenters, electricians, wardrobe and hair people, company managers, box office personnel, and others. Restaurants, parking garages and all the related businesses such as dry cleaners, cobblers and hotels will lose business. For most of us, our heath insurance is tied to earnings or weeks worked. Many families are about to lose their insurance coverage.

The theatre industry may not be quite as large as the auto industry, but the effects of this mess are already trickling down. And with tv's and cable packages so much less expensive, this won't be like the other depression of the 30's when people went to the theatre to find a dose of good cheer.

However, Broadway theatres, and other theatres across the nation raise money this time of year for a couple different charities.....(Millions over about 6 weeks) so far, our donations received from audience members over the past month are just about where they've been for the past several years. Theatre goers remain generous

The local beggars seem happier than before. They have been promised "change" and fully expect it.

There are going to be a bunch of very unhappy people here when they find out he can not just redistribute their pockets full.

I know that is not exactly what he promised, but there are large groups that only heard. Blah blah blah blah.........life is going to get better for you............blah blah blah.

I service church organs for a living. Business gets better for me when the economy is like this, but payment is very slow. On the other hand, new organ sales are practically non-existent.

Our local economy is largely driven by agriculture, not manufacturing, so there is some stability there. However, by stable I mean only as well as ag has been doing for years. We were losing small businesses before the crash, due more to the general smaller town story; Wall Mart and other chain stores taking over.
Housing here didn't climb out of control to start with, so it hasn't really tanked, but it sure stagnated. I guess we got the silver lining and the grey cloud, having sold our old house at about it's peak, but also knowing our new (to us) home is not going to gain anytime soon. At least we moved into town before the price of gas went nuts, saving us a fortune. Lenders here weren't so frivolous with bad mortgage practices either, so there aren't a lot of foreclosures.
One indicator of the bigger picture is apparent here though...
The Burlington Northern & Santa Fe Railroad has parked hundreds of unused railcars along the Missouri river here. The kind used for hauling sea-land containers full of asian import products from the coast inland. Less than a year ago, those tracks were clear because all those cars were in use.

I hope things turn around for you.

SCQTT said:

The local beggars seem happier than before. They have been promised "change" and fully expect it.

There are going to be a bunch of very unhappy people here when they find out he can not just redistribute their pockets full.

I know that is not exactly what he promised, but there are large groups that only heard. Blah blah blah blah.........life is going to get better for you............blah blah blah.

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Who's "He"?

And where do you live that you've got happy beggars? The ones around here are really struggling (and that's just on Wall Street alone)

I'm going to try to give a straight answer to this question, even though it might not sound like it. We retired and moved to a location where there really are few jobs and fewer businesses. We live in the largest county in Texas - the county is slightly larger than Connecticut - with a population of 9,000, and 6,000 of those live in Alpine. The balance of the county holds about 3,000 people.

Alpine is a typical small regional trade town with a small state university, hospital, etc. Even Amtrak stops there. We live beside the highway 53 miles south of town - 27 miles north of Big Bend National Park. It is 125 miles from our house to the nearest Walmart and over 200 miles to the nearest mall.

The balance of the county is more rural than just rural. A few large ranches. A few small ranches. Big Bend National Park lives here. River guides. A few Jeep rentals. A small fluid population of folks who camp/live in the area during the winter months. Some grizzled "desert rats" who have been here all their lives, or so long at least, that it seems that way.

In the overall scheme of things, it is a small "tourist" industry compared to other national parks - Great Smokey, Yellowstone, Yosemite - or towns like Branson, Deadwood, Cody, or Gatlinburg. But tourism is probably the major industry! Folks with RVs or on motorcycles do bring an influx of cash during the October to April tourist season. If it were not for the popularity of the Big Bend for winter motorcycle riding I suspect than many of the restaurant, motel, and campground facilities would be doing very poorly. My take is that there are fewer RVs this year, but as many or more motorcycles. It is hard to gauge because in the best of the best years the area is not crowded by any standards other than the Big Bend's. I don't see businesses closing, but ... we'll see in the spring.

People come to this area because of the natural beauty. Most visit and leave. Many keep coming back! Some love it and stay. It is a hard place to make a living - always has been and always will be. The sparse population is spread out all over the desert - some visible from the highways - most off over the hills and buttes down a few miles of graded rock roads. One of the things that has surprised us and intrigued us is the number of professional people who live here and essentially make their livings by way of the internet, and occasional travel. Architects, engineers, a patent attorney, are among the several we've met.

Certainly the southern end of the county, down by the park, was statistically poor ten years ago, five years ago, and now. It will still be "poor" 5 years from now, and probably ten years from now too. If you measure "poor" in terms of money. If you measure in other terms it is rich - not poor - but that's another story.

I think it's too soon to see how much the retail sector will contract. Most companies and businesses are doing their best to keep the doors open through the holiday season. As such, there's not a lot of vacant space in the retail centers, but there is a bit more than their was. Most of the vacant space is in new centers that were recently completed. Unfortunately, I think we'll see store closings in the first quarter of '09.

As for small businesses, I feel for them. While many of us don't like the concept of large corporations running things, we (the collective whole) do like their prices. As such, small businesses are slowly going away.

PGlaves said:

Certainly the southern end of the county, down by the park, was statistically poor ten years ago, five years ago, and now. It will still be "poor" 5 years from now, and probably ten years from now too. If you measure "poor" in terms of money. If you measure in other terms it is rich - not poor - but that's another story.

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You hit the nail on the head better than I did Paul.
I retired here from the Air Force by choice, knowing it would never be a boomtown. But I'm right between Glacier and Yellowstone, and all the country that connects them. Good neighbors and beautiful country do more for quality of life than income alone. (AKBeemer, don't be mad, my vote was in jest.)

26667 said:

I'm a professional actor. ( my cast-mates would say semi-professional) Successful shows are closing on Broadway, and only the huge hits can remain afloat. They're ok for the moment, but there's no advance. At all. Ad agencies are losing accounts which will translate into fewer jobs for voice-over and on-camera actors. Some of what work there is, now goes to non-union actors. (no Pension and health etc) New shows are having trouble raising initial investments. Many shows employ 50 - 100 other people besides actors; carpenters, electricians, wardrobe and hair people, company managers, box office personnel, and others. Restaurants, parking garages and all the related businesses such as dry cleaners, cobblers and hotels will lose business. For most of us, our heath insurance is tied to earnings or weeks worked. Many families are about to lose their insurance coverage.

The theatre industry may not be quite as large as the auto industry, but the effects of this mess are already trickling down. And with tv's and cable packages so much less expensive, this won't be like the other depression of the 30's when people went to the theatre to find a dose of good cheer.

However, Broadway theatres, and other theatres across the nation raise money this time of year for a couple different charities.....(Millions over about 6 weeks) so far, our donations received from audience members over the past month are just about where they've been for the past several years. Theatre goers remain generous

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interesting perspective, my gf is a bit of a theater nut, i work a few blocks from Broadway so i see the comings and goings daily. The big shows are holding their own as big shows always do, on the tourist dollar. I personally have been going off broadway for my shows as I cant really afford too many of those plays a year. On a recent sunday night, down at the Atlantic theater, i saw a performance of Farragut North and it was 95 percent capacity. The pulling power of name stars may have had something to do with it, but all in all, the small theaters seem to be suffering by in large. Broadway as a bell-weather for NYC is interesting because it seems to take into account the myriad of financial lows and highs around here. Personally, the lack of liquidity on Wall St is hurting me a bit as NY state tax revenues are WAYYYY down (think no bonuses, ect........it doesn't just hurt those at the top) and we are being asked to get creative here in terms of budget at the state university i work at. nyc does fare better than most in these situations, but another indicator, the european tourist, seems to be lacking a bit on the streets around my office, but it could just be because of the recent cold snap.

Oldhway said:

I run a small business which I purchased almost 4 years ago. In the four years since, I have worked and invested all I have into growing the business, this year to maintain that level of sales, I have found that I have had to sell at a tighter and tighter margin, and then starting in September we hit a wall. While we are keeping the doors open and the lights on, it's become a challenge. The cash reserves are gone and like most of America, we're just getting by. But we are getting by and I'm grateful for that.

Over the weekend I went into Manchester CT with my wife because she needed some fabric. The Jo'ann's fabric store she was going to is in a large strip mall next to one of the larger shopping malls in the state. In the strip mall, there were at least 5 vacant store fronts that had been filled last time I was there (about 3 months ago) and on the street corners by the large shopping mall there were folks holding up "going out of business, XX% off all merchandise" signs for at least 3 or 4 more stores. It was a real eye opener.

So we have discussed to death the big picture and what is happening in Washington and the stock market and in the big corporations. But how is the economy effecting your area of the country and what are you doing personally to deal with it? I guess it's that over used Wall Street vs. Main Street question but I am curious.

Ps: Please leave the political angle out of it so we can have this discussion without hitting the Doghouse.

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steve - welcome to the wonderful world of entrpreneurialism. aka: you're on your own.

my business is very recession-sensitive and i'm seeing a slowdown in my pipeline, with clients becoming much more budget sensitive.

fortunately, the last time this happened, in addition to losing a buttload of money i learned a lot about how to structure my business.

the only issue now is that i may have to send a pretty sizeable check to the government next year while starving for new biz at the same time.

no bailouts for me, gotta spread the wealth (sorry... hadta!)

ian

tessler said:

Who's "He"?

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John Galt?

Canary in the coal mine

I live in Roseville, CA. Supposedly the 2nd largest rail yard west of the Miss. For at least 2 weeks ( that's when I first noticed) there have been over 150 train engines coupled together on a side railing. Nothing for them to do. I took these pictures earlier this week for a guy I know back east. The most diesel engines I've seen idle here since I moved here in 1999 is about 5. They do service work on the engines here so that's not surprising. Usually there is a lot of activity in the yard which is probably about 40 tracks wide. Nothing happening there these days.

first engine in line:


a shot from the road of the side railing



Here's up and down the line from about the middle of a mile long line of coupled engines. #9348 is in the foreground of each shot

I am swamped with work. In fact, I'm not interested in meeting the demand.

I started teaching QuickBooks software in January through the local adult ed school program. This economic change has been coming for a while, for those who understand the trends and the signs, and I'm not surprised to see the increase in my student numbers. Either folks have lost their "real" jobs, or they were already running a business on the side, anyway. Now, they all have to learn to do it better, they can't be sloppy in their operations or their record keeping. And all of a sudden, the analysis tasks (profitability, costs and outstanding receivables/payables) are starting to be topical questions in my classes (and in online forums).

I have students whose small businesses are taking off to such a degree they can't hire enough help to accept all the work coming their way.

There has been a saying that there is always room for another restaurant, no matter how many are already in the area, if the new place is good and affordable. It raises the bar. I believe the same is true in business. A lot of folks and retailers who should never have been in business in their current business model will be shaken out of their complacency, and some will bite the dust. So be it. Did you really need a Linens & Things and a Bed Bath & Beyond and a JC Penney and a Target and a ShopKo and a Wal Mart; how many stores do you think we reasonably can support?

In Montana, we have never had the prosperity seen across the US. When the country as a whole is doing well, we are doing okay. When the country takes a dive, we are still doing just okay. In the past, I have described it as, "Now the rest of the country has been brought to Montana's level of prosperity."

We didn't have an available pool of money to lend to the housing market with no proof of income requried. Although there are three houses across the street from me, right now, on the market, they are not from foreclosures, the families have simply moved up. I have found it interesting that the asking price for the smallest has dropped three times and now is less than half what the highest is listed for. These homes vary a bit in size and a lot in view (location, location, location) and I can't believe the smallest isn't selling, it seems a screamin' deal to me. The new neighbors we've gotten this summer have all mentioned that they moved from within town, but their previous houses sold to folks coming from out of the area. I would assume the new, younger, potential homeowner is now having trouble getting financing, and we are seeing the impact of this going up the housing food chain.

$1.99 premium gas yesterday while out riding.. filled the tank for under $8.00. A month or so ago, that was $20.00. $1.64 regular gas this AM - haven't seen that since about 2000.. That's it for good news.

Vacant stores: There are vacancies in the local malls, but a lot of that is due to a huge new outlet mall opening. I expect after the first of the year to see a lot more fire-sale closeouts and vacant stores.

Home sales: are in the dumper - one condo development near me has been advertising "Only 5 left!" for the past 6 months at least. Not much market for $800k condos. Real estate values have dropped about 15% in the past few months, and houses are still not selling.

Car sales: well, I get an email newsletter from a Dodge dealer (that I bought a used BMW from a few years ago..) 2008 Dodge trucks - $2,500-6,000 off. 2008 Dodge cars - some are close to half-price now... $8,000-15,000 off.

Jobs: dunno a lot of facts, except where I work, any jobs that went vacant are staying that way. Our business is buying/selling high-technology equipment (think of high-tech junk dealers), and where I usually see 3-4 purchase orders a day, I'm now seeing 1-2, and many more offers to sell us equipment. Meanwhile health insurance costs have gone up double-digits percentages for the past 5 years and are getting so high it's becoming a real burden on the business.

The only growth industry I see is a credit counciling non-profit we share our building with. It has grown from about 20 employees to over 300 in 5 years. They continue to hire.

Visian said:

steve - welcome to the wonderful world of entrpreneurialism. aka: you're on your own.

my business is very recession-sensitive and i'm seeing a slowdown in my pipeline, with clients becoming much more budget sensitive.

fortunately, the last time this happened, in addition to losing a buttload of money i learned a lot about how to structure my business.

the only issue now is that i may have to send a pretty sizeable check to the government next year while starving for new biz at the same time.

no bailouts for me, gotta spread the wealth (sorry... hadta!)

ian

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I'm currently applying for a loand from Joseph D. Plumber. I hear he's got it to spare.



Back at ya'