The Fittest Survive

When business owner Sue Paul saw a major customer laying off employees, she started to panic. Paul feared that the sad state of the economy would undercut her company, Sue’s Safety Supplies Inc. in Fort Myers, which sells first aid kits, hard hats, fire extinguishers and other safety gear to companies. Her worry and negativity began to overwhelm her business, and conversations with employees and her father made her realize her attitude was harming morale. Paul forced herself to push away the doom-and-gloom mentality and to learn to expect the best, but plan for the worst.

"It took a few months after [the housing slump] hit to say, ‘OK, there are still people out there that like us, and they’re doing business with us and they’re paying the bills,’" she says. "We kept paying the bills, the employees hung in there. That was the turnaround."

A more optimistic outlook alone won’t ensure survival, though. Paul and other area business owners are taking steps, from diversifying and outsourcing to streamlining their budgets, to guarantee they will still be in business at the end of the year.

Spending Wisely
In past years, Vincent Salon & Spa’s budgets were reviewed every month or so to make sure sales and expenses were on track with projections. That process has been shortened—to weekly or biweekly—and the salon’s staff has become more cautious about spending.

"We’re paying closer attention to what our personnel is doing and we’re paying closer attention to what our budget guidelines are. [We’re] basically trying to tighten our belts and weather this out," says Chris Lewis, vice president of the Fort Myers business. "We agreed to be very tight and strict with our budget."

Lewis says the salon doesn’t plan to cut costs, but its 60 employees are expected to work harder and smarter. Between their appointments, stylists help out at the front desk, fold towels or perform other duties they might not have done in the past. And Lewis has spent time coaching the staff to be more productive and to take more responsibility for the salon’s success.

"We’re having to run our business more like a business and be very smart about making sure everyone is very goal-oriented. [When a customer comes in], it’s up to [our staff] to realize that they’re in business, and to offer services and product and to make sure this person is pre-booked for their next appointment," Lewis says. "We’re really much more focused on it right now because we keep hearing, ‘Hold on, things are going to get rough.’"

At Sue’s Safety Supplies, Paul continues to take a proactive approach to containing expenses. When she noticed last year that her bank of 14 years increased its service charges, she used that relationship to her advantage, negotiating fees that aren’t quite as steep.

"I said, ‘I’m not going any place.’ So many people in this day and age switch banks, switch credit-card companies, switch phones. We came up with something that was a win-win for the bank and for us," she says. "They don’t want to lose us as a customer."

To keep business and attract new clients, Q. Grady Minor & Associates, P.A. reduced its billing rates in 2007 and plans to keep the lower rates in 2008. During the housing boom, developers just wanted to get permits and titles, no matter what the cost was, says chief operating officer Josh Evans. Now, the full-service civil engineering firm is being asked to bid on jobs.

"Developers have become much more cost-sensitive," he says. "We’re pretty cost-competitive."
After a successful first year in business, with more than $120 million in 2007 transactions (including a $13.5 million home on Captiva Island), former competitors Mike McMurray and Trevor Nette want to make smarter financial decisions at their new real estate firm. "We’re looking at how much we’re spending, and spending it more wisely," says McMurray, managing partner of McMurray-Nette and Co. of VIP Realty Group Inc.

The trick is giving sellers and buyers the marketing they deserve, without plastering the market with ads and "seeing what sticks," McMurray says. They’ve stepped back from TV advertising and are focused on making their print advertising stand out. For example, he says, ads boasting gourmet kitchens and custom cabinetry are common. They want theirs to say "something a little different. We need to tell more of a story than what we have in our advertising in the past," McMurray says.

"We’re just kind of sharpening our skills," says McMurrary. "Over the last few years, most realtors haven’t done that."

Vincent Salon & Spa’s owners also have taken a fresh look at marketing and took cues from department stores to boost business during the holidays, says Lewis. Decorations in the salon were up as early as October, all focused on promoting sales of gift cards, hair-care packages and other items. Sales picked up in October and continued through the holidays.

Others are providing extra training for their staff, believing that money spent on education will pay off, especially when the housing market rebounds. Downing-Frye Realty Inc. brought a trainer on board last year to focus on skills needed in a buyer’s market. Although no set amount is budgeted for training, the plan is to continue the program in 2008, delving into topics such as developing Internet leads.

"It really has been a godsend for our company. Knowledge is the key," says general manager and broker Mike Hughes. "We feel that the market is going to turn, and when it does turn, there’s going to be a lot of real estate activity that I feel is going to happen quickly. The key is preparing for it. Training is very important."

Branching Out
Continuing to tweak business models is important for a company to weather stormy times, says Hughes. "You never settle on one set model because things are always changing. You’re constantly looking at what’s working for you, what’s not working for you and what do you need to do to improve the company," he says. That’s why many local companies continue to diversify, taking advantage of new opportunities.

Historically, Q. Grady Minor & Associates has had a diverse client base, but recently its work with assisted living facilities has grown. In late 2007, it was working on three in Lee County.

"Each one came to us from referral [by] a previous client," Evans says.

That boost, along with other land-development projects under contract, allowed the firm to hire several new employees at the end of the year, boosting its staff to 88 employees in offices in Fort Myers, Bonita Springs and North Port.

But it continues to be selective with clients, realizing the risk in this market is that payments can be slower and developers can go under before completion. "We hope that in a declining market, if we can maintain the same size and revenue, we [will be] successful," Evans says.

His advice to other businesses: "Plan for the growth once the opportunities are there; don’t get too far ahead of yourself."

New builder Community Homes expects its 2008 performance to be the same as in 2007, its first full year in business, office manager Annette Carrasquillo says. During that time, owner Doug Laskowitz had to adjust strategy. Instead of working on only new, single-family, custom homes, ranging from the mid-$200,000s to $600,000s, the company took on remodeling jobs. "It’s not something we set [out as] a business to do," Carrasquillo says. "People are tending to do more remodeling and addition work now versus going in and moving out of their home." She estimates that about a third of Community Homes’ business comes from remodeling jobs. In 2007, it typically worked on one or two such projects at any given time, from Southwest Florida to Lake Placid.

In 2008, the firm also is stepping up its marketing to European buyers. For example, its association with the European Business Council, an affiliate of the Cape Coral Chamber of Commerce, allows it to direct specific advertising efforts through LTU flights between Fort Myers and Germany.

"We are doing a lot of marketing on the European side because of the [weakness of] the dollar. There seems to be an increase in the amount of people coming over from Europe," she says.
A shift in sales strategy isn’t always easy. Paul at first resisted when her sales manager, seeing an opportunity to sell the safety products along with first aid supplies, tried to persuade her to drop their prices.

"We had some arguments about it," says Paul, whose business has operated in Southwest Florida for 14 years, but she eventually agreed. "He’s right; if we’re going to get the business, we’ve got to come down in price."

Developing new business also has taken a front seat for business owners, and some are outsourcing other duties or entrusting office operations to reliable staff. Paul is relying on her three employees, who stepped up to the challenge in 2007, to help get through a difficult market in 2008.

"I don’t think we’re doing too much differently, because we’ve worked hard all the way along. That’s why I think we’ll ride it out," she says. "My big focus now, as the owner, is to get out there and be with the customers more rather than bogged down with the office stuff."