Small business is looking up in 2004

Lolita Harper

Small business owners are optimistic about the year 2004, a statewide

survey shows, and local experts say those general predictions mean

additional benefit to local entrepreneurs, as this area has always

stayed slightly ahead of the curve.

Although the state’s economic recovery has not reached every

industry, 72% of California business owners are expecting 2004 to be

an overall better year than 2003, according to an annual survey

released last week by Union Bank of California.

Survey respondents also forecasted positive numbers in regard to

employment. In 2003 10% said they were forced to lay workers off.

About 37% of those surveyed said they expect to increase staffing

levels in 2004.

Ed Fawcett, the president of the Costa Mesa Chamber of Commerce,

said those numbers are especially positive for the Newport-Mesa area,

which tends to buffer hard economic times better than most.

“Our hits are always pretty soft compared to the rest of the

nation,” he said.

And just as the hits are not jolting, the recovery is not going to

give anybody whiplash with its pace. It should be a steady climb and

a step in the right direction, he said.

“I have a pretty good feeling that most businesses in Costa Mesa

have slowly began to climb,” Fawcett said. “Anybody who has been

feeling the pinch lately can expect a nice easy pace of restoration.”

Julie Kramer, the vice president and manager of the Union Bank of

California office on Superior Avenue in Newport Beach, said she has

seen a optimistic spirit of entrepreneurship.

“I am getting a lot of requests for small business loans; new

businesses or people want to borrow to expand,” Kramer said. “That

shows a lot of confidence.”

Kramer said businesses related to home buying or home improvement

are absolutely booming because of the real estate market. Aside from

realtors and lenders, residential contactors are experiencing a

business boom. And that trend is being seen all over the state, as

well.

“They have more business than they know what to do with,” Kramer

said.

Locally, retailers that cater to active youth, such as

skateboarding or surfing companies, continue to do well, Kramer said.

Costa Mesa resident, Jim Gray, who owns ABC Board Supply, agreed

that the new year seems to be looking good but argues that his

industry, which is specific to skateboarding supplies and not

necessarily retail, rolled through tough economic times without

taking its hits.

“Our industry dropped like crazy last year,” Gray said. “I heard

of average drops of about 40% to 50%. [ABC] took only about 20% but

that was because we were still recovering from a huge loss five years

ago.”

Gray said 2004 started off great, with lots of orders in January

and February, but argues that the widespread optimism has more to do

with probable changes in workers compensation laws. Laws that many

small business owners, including Gray, have said are ridiculous.

Kramer and Fawcett agreed, saying the positive upturn can only be

expected if changes in workers’ compensation and health insurance.

The climate in California has been taxing, Kramer said, and workers’

compensation “is the big thing that is either driving companies out

of business or causing them to struggle because of the high cost.”

“That is very likely to kill me,” Gray said about workers’

compensation. “It is pretty much putting me out of business slowly

but surely.”

The Gray family also owns another Costa Mesa small business -- the

hair salon, Temptations on 17th Street -- that has seen a steady

economic climate for the past 15 years. Gray said business is pretty

steady, with slight drops in harder financial times because people

generally spend less money on products, but loyal customers still

need to look good.

“Business is fine -- actually, it is solid,” he said.

Peggy Fort, who owns the firm California Marketing Concepts, said

she has already gotten two new clients in 2004 and echoed sentiments

of increased economic recovery. In 2003, Fort said business was flat.

“I felt like I was working harder and making less money,” she

said. “But this year has been good so far to my business, so,

hopefully that will continue to be the case.”