Top Five Businesses To Start In A Down Economy

The News Journal spoke with several local small business experts to compile a list of the top five businesses to start in a slow economy.

"In this economic environment I would focus on services-related companies and less on the retail sectors," said Dan Cavanaugh with the University of West Florida's Small Business Development Center. "I would look at needed services that are not discretionary."

Larry Strain, director of the SBDC, echoes Cavanaugh's recommendations, adding, "I would look at businesses that provide necessities or high-end luxuries. Even when people are down economically, they will still splurge, especially when they are bummed."

Strain and Cavanaugh recommend businesses that extend the life of existing appliances, automobiles, or home amenities.

Their list, and those of other experts, contains some very traditional enterprises, and a few surprises for the risk averse.

We also spoke to existing local business owners in these categories and asked them to share their strategies for not only surviving downturns, but flourishing in them.

One interesting aspect of those businesses interviewed: all had some eco-friendly, green element to their endeavors.

1. GREEN BUSINESSES

Jen Knight, owner of End of the Line Café on Wright Street

Knight is celebrating her sixth year as owner of End of the Line, a vegan restaurant and coffee shop that is not only an extension of her personality, but her lifestyle as well.

A Pensacola native, Knight saved several thousand dollars from a previous job and invested in her café, starting slow and carefully.

"My approach to opening and running this business is that I'm not going to spend more money than I have," she said. "When I opened End of the Line, I didn't buy a bunch of bright shiny new equipment. When I had the money, I bought things we needed. I didn't want to put myself into debt."

Knight keeps costs down by recycling everything that comes into her restaurant. Food scraps are picked up and sent to a compost site, and all paper and plastic products are recycled.

Her so-called "carbon footprint" is kept to a bare minimum, and all her food deliveries are made by bicycle by a local courier service. Her light bulbs, hand soaps and glass cleaners are eco-friendly.

A cyclist herself, she and business partner, Ryan Modee, even go shopping for restaurant food supplies on their bikes.

Knight started her business on a simple premise: pay in cash and cut corners wherever you can.

"We saved money by buying our dishes at Waterfront Mission, and I cooked off a George Foreman grill for a long time."

So, how is she doing after six years in business?

"We are growing," she said. "We need more space."

2. e-BAY STORES

Thwanna Price, educational specialist for eBay

One of the hottest tickets in Pensacola these days is Thwanna Price's Saturday classes on how to start an eBay store. Typically, they are packed with business owners, garage sale aficionados and the curious.

"Most of the people I'm instructing are the very beginners, who just want to kick the tires and see if it's something they want to do," Price said.

Price's five-hour classes cost $60 dollars a person and cover everything involved with setting up a virtual eBay store — registering with eBay, techniques for listing sale products, mailing the product, arranging for payment and following up after the sale.

"I walk them through the entire process," Price said. "I've had business owners who want to branch out, businesses with inventories they want to sell, and individuals who are selling estate items, china, glassware, silver."

Price says one of the most important things she teaches prospective eBay store owners is patience.

"I try to teach them how to take photos," she said, "how to ship products and most importantly is how to enjoy the process."

Interested parties can sign up for Price's classes by calling 473-7830.

3. THRIFT AND CONSIGNMENT STORES

Mary Kaye Weekley , Lads and Lassies, a resale shop.

When times are slow and consumers are taking a beating, Weekley's consignment business always picks up.

She should know — Lads and Lassies is celebrating its 25th anniversary this year, and business is good.

"What I've found over the years is during tough times people will clear out their closets and turn clothing into cash," Weekley said.

Weekley has seen plenty of ups and downs, but over the years has managed to stay one step ahead of tough times by listening to customers, responding to their desires and taking advantage of available technologies, including the internet.

"We listen to customers," she said. "They tell us what they want, and we go looking for it. I'm also selling a lot of furniture now; it's becoming very big."

Weekley, an active member of the National Association of Resale and Thrift Stores, said starting a consignment business, or resale shop, is something that can be done without a large capital investment.

"You can start this business with a lot less money because you really don't have to buy anything," she said. "People bring you things to sell."

But Weekley does have one caveat for anyone thinking of starting a resale store: "It's a labor intensive job," she said. "It's very physically demanding."

4. AUTOMOTIVE REPAIR OR SALVAGE

Jerald and Kate Henson, owners of Jerald Henson Automotive.

The tougher the economy, the higher the gas goes, the more work is created for business men and women like Jerald and Kate Henson.

They own a small automobile repair shop on Johnson Avenue, just off U.S. 29, and most days the service bays are packed with cars and trucks.

Henson's business these days is driven by consumers drained by high gas prices and hoping they can coax another 50,000 or 100,000 miles out of their vehicles.

Needless to say, it's been a busy year for Henson and the three mechanics he employs.

"People are definitely not buying as many new cars, and are more apt to repair them," Henson said. "I'm seeing a lot of people moving from SUVs to smaller cars."

Henson, who began working on cars in high school, recently moved his business to larger quarters and is seeing it thrive.

"People are being more diligent about servicing their cars," he said. "I'm big on maintenance, changing fluids, tune up, changing out belts and hoses."

Starting an auto repair business is not as capital intensive as you might think, Henson notes.

"My biggest expense is keeping up the electronics I need to service cars," he said. "My overhead is not that bad, I'm leasing the building and my wife helps with the books and running the office."

5. SCOOTER SALES

Gary Gooch, sales manager, Vespa Pensacola.

It's no surprise that scooter sales have taken off this year.

As gas prices soared this spring and summer, so did 100-mile-per-gallon scooters, and despite a slight pull back in prices in August, there's no sign of a letup, said Vespa Pensacola sales manager Gary Gooch.

"We're doing great," he said. "I can't believe the increase in sales we've had over the past year. Scooter sales nationwide are up 186 percent over last year."

In fact, scooters like Vespa, Aprilia and Moto Guzzi, are selling faster and in greater numbers than most motorcycle brands, he noted.

"I'm selling them across the board, to older men and women, kids going to college," Gooch said.

"Everyone is feeling the pinch of high gas prices," he said. "A lot of people these days are being much more conservative about what they spend on fuel."

Unlike some other start-up businesses, getting into scooter sales does take a sizeable capital investment — for inventory, sales and service personnel, and floor space.

"You have to believe in what you sell," Gooch said. "And I believe in the scooter products we sell."