Posted on 01/04/2004 6:31:47 AM PST by Holly_P
Hours, costs and large competitors often overwhelm the small entrepreneur. Sometimes the most difficult move for the small business owner to make is to quit — to throw in the towel.
Add Dave Simpson's name to a long list that already includes its share of corner grocers, independent pharmacists and mom-and-pop stores of all kinds.
Like many other entrepreneurs, Simpson, the 47-year-old owner of Simpson Automotive in Waterbury, decided recently it's too difficult to work for himself.
In November, after nearly 22 years in business, Simpson closed the doors for good at his Watertown Avenue garage, a job he maintained while also working as head of Waterbury's Central Vehicle Maintenance Department for the past three years.
"It's not the same," said Simpson. "The repair industry has changed."
Simpson's decision to go from employer to employee is hardly unique.
In September, the owner of Litchfield's Towne & Country Video, the town's only independently owned video rental store, closed her business after 15 years in the wake of Blockbuster's arrival less than a mile away. Independent pharmacists in Norfolk and Southbury both recently closed their operations and went to work for competitor chains. They are among nearly 8,000 Connecticut business owners to call it quits since the start of the year, according to the Secretary of the State's office.
The reasons for getting out of a business can vary, said Michael K. Kelley, founder and senior partner of Dreamcatcher Programs, a career consulting service in Waterbury and Cromwell.
In addition to the difficult economy, it's not uncommon for business owners to simply tire of the number of hours they put into the venture, Kelley said. Others may get fed up with the costs of being in business, particularly bills for things like medical insurance, he said. In that case, the benefits that come with working for someone else can be appealing. In other cases, business owners may just want a change.
The opportunity to leave a job at the office can be compelling for a business owner who doesn't often get that luxury.
"You never walk away from your job," Kelley said. "For most entrepreneurs, they've got a lot of capital invested as well as they're own psychology invested. Yes, you may get 100 percent of the profits, if there are any, and you get to make all of the decisions, but the down side is you get to make all of the decisions."
Kelley said three or four of his clients who owned successful businesses recently decided to return to the corporate world. One was a woman who had been a decorative painter for more than a dozen years, another owned a liquor store for more than 20 years.
"They came to me and said, ‘How do I get back into the corporate world? I want to do something different,'" he said.
Still other business owners find the market moves away from them, something Kelley himself has experienced. In addition to career counseling, he offers corporate training with an emphasis on the manufacturing sector. With the that sector in a protracted slump, that part of his business has been in the doldrums, so Kelley said he has moved to more career counseling.
‘Getting worse' For Simpson, it was a combination of things that led to giving up his business. Among them:
The days of the annual tune up have been replaced 100,000-mile warranties.
There are more newer vehicles needing fewer repairs on the road.
And gasoline sales are hardly worth the trouble. That meant the cost of doing business was quickly outpacing revenues.
"These trends have continued, and I only see them getting worse," Simpson said as he spent an afternoon taking care of last-minute work at the shop in October. "For that reason, I decided to close."
Simpson has been working on cars since he got his first taste of repairs at age 13, when his father gave him the choice of a new bicycle or a $15 Ford Falcon that needed a new engine. "I chose the Ford Falcon," he said.
On April 1, 1982, he opened a Texaco gasoline and service station on Hamilton Avenue in Waterbury's East End. "Four years after that I opened a second location in Heritage Village," he said.
After 11 years in Heritage Village, Simpson said managing the two distant operations became too much, so sold that operation to his manager, Robert Edwards, who still operates the station as Heritage Village Automotive.
By the late 1990s, as he saw some troubling trends developing in the industry, Simpson said he began thinking about a career change. Three years ago, he took the civil service test and was hired as head of Waterbury's Central Vehicle Maintenance Department, where he oversees 19 employees who maintain a fleet of roughly 315 city vehicles, from plow trucks to police cars. The job also brought with it things like a retirement plan and vacation time, commodities sometimes hard to come by for small business owners.
"The right decision for me would have been to close the business at that time," he said.
Instead, he decided to keep the business open, find another location and concentrate just on repair work. He moved to a garage on Watertown Avenue, then split his hours at the shop around his city schedule. He organized paperwork in the morning, then put in hours at night at the garage, where three people handled the day-to-day repair work.
Ultimately, he said, the decision boiled down to business.
"There was not enough billable hours at the end of the day," he said. "I would have kept Simpson Automotive open forever if it paid its own way."
He said the cost of doing business has changed drastically since he opened that first Texaco station:
His first month's rent in 1982 cost him $700. His last month's rent cost him $2,900.
His first insurance bill cost $2,400 annually, compared to his current $13,000 bill, while his first health insurance bill cost him $160 a month. His last bill totaled $810 a month.
He hired his first mechanic for $8 an hour. It's $20 per hour now. Even though his labor rate climbed from $34 per hour to $60 per hour, it still wasn't enough, he said. Realistically, it needed to be around $80 to $85 per hour.
‘A dying breed' It wasn't rising costs that put Towne & Country Video out of business, says owner Lynnette Letsky. It was the arrival of Blockbuster video, which opened in September 2002 less than a mile away on Route 202 in Litchfield. The $5 billion national chain had an immediate effect.
"Within three to four weeks of them opening, I noticed a gigantic decline in my business," she said. "By the end of the first year, it was no longer viable for me to stay in business."
Letsky had fought Blockbuster's plan to open in Litchfield, circulating a petition against the chain, encouraging the officials to deny its application and writing a letter to her customers. She started her business at age 23, staying open seven days a week, 365 days a year.
"For the first few years, that's basically what I worked," he said. "I had long hours, then I had a small staff, and I grew my business. I'd always wanted to own my own business. At that time, going into the smaller towns, you were more or less safe. These giant chains were not going to invade."
Letsky ultimately employed about 10 people, many of them local high school students.
"I loved my business more than anything," said Letsky, who now works for a Waterbury company. "I loved being part of a small business community."
It's not just the loss of her business that bothers her.
"What creates a community is small businesses," she said. "Not only are we losing our small businesses. We're starting to lose the structure of the communities. I actively seek out the small business owner, because we are a dying breed."
Simpson agreed. Since closing down, he said he's been regularly approached by former customers.
"I've been stopped on the street. I've been called at home. I've been stopped at church," he said. "They're more our friends than they are customers. I just don't get that same sense when walking into a big business.
"I think we are being very short-sighted," he said. "I don't think the reality of the loss of all these mom-and-pops has really struck the public yet. Someday, it's going to be gone."
| Rank | Location | Receipts | Donors/Avg | Freepers/Avg | Monthlies | |||
|---|---|---|---|---|---|---|---|---|
| 7 | Minnesota | 305.00 |
10 |
30.50 |
250 |
1.22 |
100.00 |
7 |
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And then there's the handful who are content where they are.
With all the government interference these days, I can't imagine owning your own business is much of a treat.
Video stores are going out of business because super-stores are moving in that offer more variety and lower prices for consumers. And that's a bad thing too?
BTW, if you invest in Blockbuster, consider dumping your stock now while you still can and buy the stock of your local cable company. Video rental is going to be a dead business very soon as cable offers every movie and TV show ever made "on demand."
Of course, I could always get laid off. I kid around that I would love to get laid off, because it'd give me a reason to get the hot dog truck going and change careers. But I probably would miss the paychecks. But I can't say I am content with what I do. I can say that I can accept it and try to advance my goals, but I don't love what I do. I am trying to learn how to be reliably content with it. I do think once the house is paid for, options open up.
Blame the do-gooders in the Democratic Party. They rail and rant about bringing 'big business' to heel, but the laws and regulations they pass always seem to affect the small businessman too. And he is not as able to spend the time and money required to comply. Taxes, regulations and compliance costs push him over the edge like the people in this story.
These costs are proportionally less for a large business. And the big businessman can raise his prices to pay for the regulatory costs and taxes, because his small business competitors have been run out of town by the anti-capitalist do-gooders.
Big business thrives. Government employees thrive. Consumers pay more. Small businessmen die. That's the Democrat's formula for America.
-ccm
Do you own your own business? The article is more truth than you probably realize.
Regulations and insurance costs have pretty much driven my business overseas. The offshore contingent doesn't have to abide by the oppressive regs and pay the prohibitive insurance costs that we do here.
Yes, and am doing quite well.
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