While it’s pretty much a given that the economy isn’t doing so well these days, I was still bummed to read an Oregonian article last week on small businesses and the difficulty in getting loans these days, to see a place I visit — Barberama/Javarama — as the focus of the story. In brief, Nicole, the owner of the salon, has put the salon up for sale as she’s unable to obtain a new loan from a bank.
Sadly, I know and realize this isn’t an uncommon story. Places like salons and restaurants tend to be high-risk ventures. That becomes more evident when the economy takes a turn for the worse as people opt to cut their own hair, buy a box of Clairol at Walgreen’s, or cook more food at home than eating out.
While it is definitely easier in this town to frequent the locally-owned businesses over the national chains, the smaller shops are the ones at risk. They can’t alter their prices up and down as much as a larger store can from week to week. Much ado was made about Starbucks closing stores, but there are still plenty around town, while if a place like Javarama or any of the other one-off coffeeshops were to close up, that’s it for them.
We all have those locally-owned shops that we love to frequent and rave about to our friends and colleagues. We can’t save them all, but perhaps if you were putting off dropping a few coins to your fave vendor, try to stop by sooner than later.
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Dang, I wanted to try that place. Too bad.
Hmmm…we talked about this a lot yesterday (although not specifically about either Barberama or The O’s article) during From Side Project to Start-Up.
The big takeaways? You need to get yourself a 2-year cash runway before you start a new business. Tapping on friends/family or giving away control (in the form of equity in the business) is far preferable to incurring credit card debt or taking out a home equity loan, for example. Earlier lines of credit may be cut back – even if you have stellar credit/payment – as the economy tightens.
And you need to look really really carefully and realistically (I’d say pessimistically) at your odds. I never did understand how she intended to make the coffee shop fly, given the location (she can’t count on either pedestrian traffic or spillover from related businesses nearby, for starters.)
People drink a lot of coffee in this town. On that particular stretch of MLK, unless you’re getting coffee at the gas station on NE Fremont, the next closest place is probably the Starbucks on NE Ainsworth or the Starbucks inside the Safeway across the street.
When you look at a place like the NE location of Tiny’s where there really isn’t much foot traffic or nearby spots to frequent, I’m not sure I agree that the location of the shop is as much of a factor. Since Barberama/Javarama moved to the neighborhood, there have been a few new restaurants that have opened up.
I really think it’s more related to people cutting back on spending on services they feel are extras in their budgets. That said, Barberama is such a great deal, that it’s a shame more people didn’t know.
Wait, what? NO! I have (or, perhaps, HAD?) an appointment for October 5th… Le sigh. I found Nicole again just a couple of months ago after she had to leave the place on Broadway a while back.
I’ll have to email and find out what’s what.
(Weird the way websurfing works… I started out looking for info about ORblogs, found myself worried about my hair instead!)
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