The Citizen Explores the Effect of Today's Economy on Local Business

By Dianne Lively Yost and Kathryn Schiliro

The shockwaves of September’s financial tsunami that continues to rip through Wall Street, demolishing banking, investment and insurance powerhouses, putting downward pressure on stock markets and crippling the flow of credit, is now racing through Main Street. Today, Georgia’s unemployment rate is at a 26-year high of 8.1 percent, although Morgan County appears to be weathering the crisis better than most. But, not all is bleak. Businesses continue to open up in Morgan County, while existing businesses are prioritizing, cutting costs, becoming more efficient and looking for new ways to expand their reach. At the same time, many Morgan County residents are opting to spend their dollars at home, looking to our local retail and service industries to fill their needs. Shopping local has taken on a new meaning as local dollars spent at home help local families and generate local tax revenue. The Morgan County Citizen recently sat down with a number of local business and civic leaders to hear first hand their take on the economic downtown and to learn how they are approaching the challenge.

Mike Hutchins of SFB Enterprises, Inc.
In November 2007, developer Mike Hutchins of SFB Enterprises, Inc., miraculously survived a horrific traffic accident. It was so bad the state patrolman pronounced him dead at the scene and his extensive injuries required months of physical therapy to bring him back. But back he is.
In Madison, he’s known for his masterful renovation developments at The Ice House located between West Washington and West Jefferson Streets and the old Pig Building on Main Street in Madison now known as North Main Village. To friends and colleagues who know him, Hutchins  epitomizes perseverance and he plans to tackle the slowing economy by living up to that reputation.
To prove it, Hutchins and his partner Kathleen Rosskopf are hosting an Anti-Recession Blowout Party or “ Big Splash” as they call it on Thursday, Feb. 12 at 311 North Main Street (The Old Pig Building) from 1 p.m. until dark and he’s inviting the entire town to participate. His flyer promoting the bash says it all: "Life is about family, friends, attitude and happiness. It seems there has been an awful lot of bad press to repress those things. Too much gloom and doom. Let’s get together and show the rest of the U.S. we are tired of it! And this wonderful town and business people will not support the recession any longer! We are very proud and very different and this is the best place in the U.S. to live, play, shop and work."
“I’m proud for what we do have. I’m a happy man, lucky to be here and I’m back! I didn’t ask for the hand I got dealt. The only thing I can do is play it out. How many times do you get to make a different in this town? What are the odds? They don’t exist!” That’s why Hutchins wants to make a splash next week for the public. It’s a way to showcase his projects and to celebrate Madison and Morgan County. And, other local businesses are catching Hutchin’s enthusiasm. Many local businesses are pitching in to make the event appeal to everyone, young and old. From entertainment for kids and good food from local restaurants to displays and demonstrations by local businesses, some 20-plus companies and individuals are planning to participate in the Anti-Recession bash.
As to the current economic climate, Hutchins sees the current challenge with hope. “Whether the enemy is a foreign country or an enemy inside our own system, America is stronger. We have faced the economy as an enemy before and we always come through as a nation. My only mission with this event is to return some of the spirit and hope which unselfishly was given to me in the last few months.”

Vince Campbell of Family Chiropractors of Madison
Especially in this economic environment, Dr. Vince Campbell of Family Chiropractors in Madison advises business owners to keep a positive frame of mind and make health a priority. “What I’ve taught in our Chamber’s small business success class are two things that have never been more important than right now. The first is that anything is possible. The idea is that you can do anything. The only limits are those you impose on yourself. If you think you can or think you can’t. You’re right. The second is that imagination is more important than knowledge.  What you think about something, your mental image of a situation is more important. Try to re-envision the situation in a positive light.”
“When you go shopping or eat out in a restaurant, you’ll see that people are spending money. There are businesses surviving. If some are doing well, then anybody can do well.  Some businesses might be doing badly, but you don’t have to own that. And, remember that businesses close down even in good economic climates. Don’t give up hope. Find a way to grow, tap new markets and improve verses looking for ways to avoid trouble. You take responsibility for your choices. Don’t be a victim. Don’t limit yourself. Don’t believe that what you see is all there is. Instead, open up to new possibilities.”
As to making your health a priority, Campbell says: “Without health, everything else loses its meaning. As you lose your health, it highlights how important your life is no matter whether you’re living in good times or bad.  At Family Chiropractors, we try to help our client’s prioritize by encouraging them to put themselves and their health first and then get on with their life.”

Sandra Black and Shelly Massey of A Superior
Answering Service
& Call Center
Despite the economic downturn, companies continue to be attracted to Madison and Morgan County. Indeed, this month, Madison will celebrate the opening of a 36-employee-strong service company that just relocated to Madison from Conyers.  A Superior Answering Service & Call Center officially goes live from Madison at 311 North Main Street next week.  “We liked the area and since we run a 24-hour service company, we needed a place where our employees would feel safe and comfortable,” said Massey.
Sandra Black founded the company on Nov. 2, 1976 when her daughter Shelly Massey was five years old, today more than 30 years later this mother-daughter team is infusing Morgan County with a healthy dose of much-needed economic activity.
“We have approximately 800 clients, which is fairly large and about 90 percent of our clients are Georgia based,” said Massey. About 50 percent of their clients come from the health care industry, but they literally provide answering service capabilities for any type of business from internet marketing and e-commerce website services to employee communications systems for human resources to one-man contractors, health care providers, and even municipalities like the City of Sandy Springs.
A Superior, which services 6,000 calls per day, is a great cost alternative for people who need to save money. “We can answer your phones for as cheap as $69 per month depending on volume. The average customer pays $100 per month,” said Black.
The economic downturn has not had much impact on A Superior. According to Black and Massey, the company has lost some construction clients, but has replaced those clients with other businesses including four local clients. “We had a great January and are definitely planning to grow,” Massey said.

Mike Torino, Chief
Executive Officer of Amici Food Group
Madison-based Amici Food Group Chief Executive Officer Mike Torino, who oversees three franchise locations of Amici Italian Cafes and three corporate-owned locations, says he’s not sure there’s one silver bullet that will take us out of the current economic crisis. “We can’t wave a magic wand and make it go away, but we can address the environment we’re in with less people walking through the door. We addressed it by reducing costs and expenses so that we can meet our obligations. It’s definitely not business as usual.”
In spite of a challenging business environment, Torino is also looking for opportunities to bolster his company and build brand loyalty among new and existing customers. “The strength of the Amici brand is stronger than it’s ever been. We have three franchise locations (Milledgeville, Lake Oconee and Augusta) and three corporate locations (Covington, Athens and Madison) and we’re constantly looking at ways to improve our operations on day-to-day basis.”
Torino says his company is seeing customers who may have been going to more expensive restaurants like the LongHorns of the world, drop back to a more moderately priced restaurant like Amici Italian Café. “We want to satisfy that niche. We’re also adding services that consumers want like pizza delivery services and delivering fully prepared meals to both businesses and families. We’re trying to add services that people can utilize that weren’t there before.”
And, while Torino acknowledges that there are people out of work, he believes that when we start to see positive trends from the Troubled Assets Relief Program (TARP), people will start to open their wallets. In the meantime, he says we have to buckle down. “Our management staff is working very hard, wearing multiple hats, but once the dust settles and people begin to become comfortable, we believe we’ll see business grow.”
We’ve been around 17 years and have weathered other economic downturns and we’ll weather this one as well. It’s onward and upward from where we are,” he said.

Sheri Clark, Co-Owner of The Madison Gift Mart and Cafe
While tourist traffic has declined at The Madison Gift Mart and Cafe in downtown Madison, co-owner Sheri Clark has seen a boom in business from locals. And she's excited about it.
"Local business for us is up tremendously," Clark said, reflecting on recent lunch traffic. "One day this week was terrible, but yesterday and today have been wonderful, and it has all been locals. Saturday is when we see the tourists."
Clark credits much of the business she has gotten to the promotional campaign put on by the City of Madison.
"I think the promotion we had in November and December that the city funded...Cable TV, DOCK 103, the billboard outside Watkinsville - all of these things helped us tremendously," Clark said. "The city is trying hard to work with us."
Clark acknowledges that the downtown Madison business community needs to stick together if they are to weather this recession and come out on the other side, as more businesses means more diversity which, in turn, means more potential customers.
"The more shops we lose, the harder it will be," Clark said. "It's a matter of pulling up our bootstraps."
Clark's husband and co-owner, Rolly, agrees.
"The more we hold each other's hands, the stronger we'll be," Rolly said.

Pam Jones, Owner of Rutledge's The Barn Raising
Foot traffic isn't quite as strong in downtown Rutledge, and The Barn Raising owner Pam Jones is feeling the effects of the lack of local business. The business is managing to stay afloat, however, largely due to internet sales and marketing to return, out-of-town customers.
"I would say foot traffic is way down, but I have had many small sales, but also some larger ones that have helped keep my volume up," Jones said. "My good sales, one came from the internet. Then I have out-of-town collectors that I let know when items...come in."
To keep business up, Jones plans on keeping up with her customer lists and getting The Barn Raising more visibility on the internet. Locally, though, she depends primarily on word of mouth, hoping to get more Morgan Countians in her store.
"I've been here so long," Jones said. "Local businesses could definitely benefit from more local support."

Molly Lesnikowski, Owner of Rutledge's Red Doors Studio
Molly Lesnikowski, owner of Red Doors Studio also in downtown Rutledge, agrees that business is slow. She blames it on the weather, and timing.
"Things are slow out our way," Lesnikowski said, in an e-mail correspondence. "However, that is typical of this time of year. Our area is very weather-driven. I tend to think of the winter being 'over' at Valentine's Day. It usually begins to pick up after that and continues to improve through the Masters on into May with our fair and assorted activities, culminating with the Sunflower Festival."
Additionally, Lake Rutledge

at Hard Labor Creek State Park can be counted on to draw tourists and locals through town, Lesnikowski said, which means business for the downtown Rutledge area. She also cites the "you-pick-'em" crops - blueberries in Watkinsville and peaches in Rutledge - as a draw for business.
"I think things of that nature will do well in this economy," Lesnikowski said.
The bottom line? In Rutledge, business - both local and out-of-town - seems to be hibernating, not through the recession, just through the winter.

Bob Hughes, Economic Development Director of the Madison-Morgan County Chamber of
Commerce
With the nation's unemployment rate at over seven percent and Georgia's above that at more than eight percent, the outlook isn't exactly pleasant. Even in Morgan County, the number of people filing unemployment insurance claims in the county jumped from 100 claims in December 2007 to 376 in December 2008, according to Madison-Morgan County Chamber of Commerce Economic Development Director Bob Hughes. While there have been cutbacks in hours and elimination of some jobs, all has not been lost, at least not in Morgan County.
"More [businesses] have opened than closed...Take Barkin' Dogs [Shoe Company], Town & Country," Hughes said.
Hughes recognizes that it takes a lot of small businesses like this to make up for larger closures in the county, like that of the Denon plant. But, local businesses are fighting to keep their workforce.
"I do know instances of employers making payroll out of their own checkbook," Hughes said. "They have skilled workers they want to keep on."
Relying on the state and companies like Georgia Power, which has international ties when it comes to recruiting, to get the word out about Morgan County, Hughes is doing his part to be sure that the community is front and center when it comes to attracting additional industry. He keeps a list of available industrial-zoned properties and available industrial-use buildings up-to-date, and works with Georgia Power to keep that on www.selectgeorgia.net, a Web site used by the company as a recruiting tool. He also keeps the state and Georgia Power supplied with literature, the latest featuring Madison Business Park, a 324-acre industrial tract of land bordered by Indian Creek Road, Pierce Dairy Road and a Norfolk Southern Railroad line. And Hughes is constantly hosting "Familiarization Tours" for statewide developers and project managers and foreign companies looking for a relocation site.
Hughes believes that Morgan County won't be devastated by the recession; it just has to make it through. And while business and traffic has slowed, it certainly hasn't ceased.
"We've got a lot of folks stop through that are interested in the county," Hughes said. "We are doing all we can to put ourselves in front of developers...We just need to tie a knot at the end of the rope and hang on."

Everett Royal, Local
Developer
Local developer Everett Royal of Madison is not discouraged by the current recession. “I have to believe that our town is among the top 10 percent in the state.” Royal built and now operates The James Madison Inn on West Washington Street in downtown Madison and he also transformed an old cotton warehouse into Madison Markets, a shopping destination that houses, retail, antiques and dining outlets like Town 220.  “We still have people coming to Madison; there’s still an influx of new people. I’m astounded by it,” he said.
According to Royal, we have a diverse economy and a unique town and those two characteristics never change. “The good things that make Madison unique are the same things that strengthen us in down times. That’s the silver lining for Madison.”
Royal is also confident Madison and Morgan County are well positioned to weather the current economy because our demographics provide us with stability. “I don’t think unemployment is as high in Morgan County as in other areas in the state and I don’t see significantly greater numbers of residencies for sale; although homes may stay on the market longer.”
As to operating a business in this challenging environment, Royal’s advice is simple: “Keep expenses as low as you can and increase your ad budget.”

Charles Haney, III,
President and CEO of Madison Bank Corporation
On the national level, all bank news seems to consist of a generalized outlook of, well, doom and gloom. Not so for the smaller, more localized banks, especially in Morgan County, says Madison Bank Corporation President and CEO Charles Haney, III.
The Madison Bank Corporation continues to maintain a steady flow of new checking and savings accounts.
"We've not seen any decline in the customer service areas," Haney said.
What's more, the Madison Bank Corporation is able to lend. The types of loans, however, have changed.
For a number of years, Haney said, the bank made numerous land loans. That area of lending, now, has decreased dramatically.
"People coming from the city, buying land," Haney said. "There's been a significant decline. Traditionally, as values decline, people wait until they've seen the bottom before they buy."
Further, construction lending, which the Madison Bank Corporation has done quite a bit of in the last 10 years, has ceased, Haney said.
"Until the values of those properties adjusts, there won't be much construction lending," Haney said.
According to Haney, it's not that his business doesn't have money to lend; instead, he cites a lack of qualified borrowers. That, he says, is part of what has decreased lending on the local level.
"Due to the reduction of qualified borrowers, much of the traditional community bank lending has slowed down," Haney said.
And it's going to get worse before it gets better.
"All indications are there's going to be a further decline in the state and local markets," Haney said.
There is good news. Because Madison and Morgan County haven't seen the growth that other communities have - more than two percent versus other communities that have seen double-digit growth - it doesn't have quite as far to fall, and will take less time to recover.
"The good thing about it is Madison hasn't seen the highs and, therefore, won't see the lows that many communities will see," Haney said. "Madison and Morgan County is very resilient...Because we've not seen that larger growth, we'll see a shorter stabilization period. We will come out of this much faster because we are not in as deep."
Haney also cited the fact that keeping local money in the county will do nothing but aid in hurrying the process of getting back up along.
"Folks ought to buy locally at every opportunity," Haney said. "All it will do is speed up the recovery process."
For now, Madison Bank Corporation, much like Madison and Morgan County, is holding steady, and won't be going anywhere anytime soon, Haney said.
"We feel like our bank remains in a very strong position and we're optimistic about the future of this community," Haney said.

PUBLISHED IN THE FEBRUARY 5, 2009 EDITION