In spite of headlines touting home sales in the Bluegrass as better than the national average, a leading real estate agent and neighbor, with over 20 years in the business, echoed the common cry of "it's the worst time ever for the housing industry!" She told of a friend, another agent, who used to average 20 closings a month, who was now glad to have four closings and five auctions in October. "The banks are so tight with their credit criteria, no one can get approved," was her take on the current slowdown.
The agent herself has two rental properties available, and while you would think this would be a good time for renters, she shrugs, "many applicants can't pass the credit check or put together the deposit and first month's rent to qualify."
"So, if they can't buy and they can't rent, what are people doing?" I asked.
"They're living with their parents and relatives," she exhaled. "It's the worst time ever!" Luckily, she is of an age and ability to retire, but she still went ahead and paid her real estate board dues of more than a thousand dollars for the next year, hedging her bets.
"You never know what will happen," she says. "Many agents are finding part-time jobs just to get through these times." Hedging bets is one sure way to deal with the current economy.
Even before the downturn, however, Julie Young, owner of The Paperweight on Clay Avenue, looked at her sales figures for last year, saw the drop in purchases for non-essential gift items, and began to get rid of some inventory. "I've moved back to my core service of designing and providing invitations for weddings and special events and personalized stationery," she says. "This is what we do best. This is what we're known for." Young has not only returned to her core but has rescheduled store hours to four days a week. "Everything's different these days." The store is open to the public Tuesday - Friday, with appointments available on Saturdays and Mondays.
Some small businesses are hedging their bets by partnering with others and attempting to attract clientele with offers of financing help. Last week, for example, Rodney Hatfield Chevrolet was promoting visits to his lot - - and hopefully sales - - by offering a $25 savings at The Tire Place just for potential customers to show up and look over his inventory. Their homepage flashes a financial "We Can Help" section that bullets: "Divorce, Tax Leins, Bankruptcy, Charge-offs, Medical Bills, Repossessions."
Great Clips on East High Street already offers low prices on haircuts and styling, and now you get discounts at Papa John's when you show your Great Clips receipt.
Small businesses serving niche markets are working it to their advantage. Pete Bennett, Manager of Coach Craft Auto/Truck & Boat Interiors, says business is about the same but admits it's a challenge to pass along all the increased shipping costs to his customers. "We have to absorb some of it, because everything - - shipping, inventory, accessories - - is increasing in cost." Bennett says more of his customers are coming in for a full interior upholstery these days, which means "people are improving what they have rather than buying new." He's cautiously optimistic.
Consignment store owner, Julie Selby of Room Service, would agree that more people are avoiding "buying the new." She reports more furniture coming in and newer shoppers in her Liberty Road store. "There are more people wanting to change out what they have or they want to sell certain pieces of furniture. We're definitely seeing shoppers who've never bought consignment or been in Room Service before."
Finding a niche and working it means finding or developing that small, but growing market of customers who need what your business offers.
Ralph Martino, owner/manager of Christopher Michael Fine Furniture says he hedged his bets and tested the Lexington market by first opening a small store on Jefferson and Short Street before moving back to the Bluegrass after 13 years in Tampa, Florida. Their new store in Chevy Chase offers a mix of quality furniture and accessories from all over the world, balancing - - as Martino says - - "fine, unusual pieces with value pricing. Our goal is to become the source for affordable luxury." Martino says he had a wonderful store in Tampa, "but I'd gone to UK and wanted to come back here. We did well when we tested the store on Jefferson & Short, and it's paid off. We're doing even better since our move to East High Street in July."
Janet Holloway is president of j. holloway & associates and co-founder/executive director of Women Leading Kentucky. A national columnist for womenentrepreneur.com, she can be reached at jhollow@alltel.net.