Starting a Business in a Recession

By Beacon Staff

Lynde Price prepared herself for numerous challenges when she started her own business. What she couldn’t have fully prepared for was a debilitating recession.

Price’s Fawn Boutique, located on Main Street in Kalispell, opened last fall around the same time the national economy completed its nosedive. Even when signs pointed to a downturn earlier, the wheels were already in motion for her business to open. Price adjusted and stayed the course, taking advantage of the good stretches in order to endure prolonged slow periods.

Last year’s Christmas shopping season was productive and she’s hoping for the same this year. Then, like with other business owners, it’s a matter of outlasting the recession.

“If I can make it past this,” she said, “I think I’ll be OK.”

Price is not alone. Businesses have sprouted up across the valley over the past two to three years. Along with Fawn, Kalispell stores such as Uncorked and Camas Creek Yarn, were greeted by the recession shortly after opening. New businesses in Whitefish, Columbia Falls and Bigfork have faced the same dilemma.

Melanie Cross, co-owner of Camas Creek Yarn in downtown Kalispell, has actually enjoyed steady growth since she opened two years ago. This is partly due to what she says is a natural human tendency during tough economic times: People want to keep their hands and minds busy, both of which can be achieved through knitting and crocheting.

Cross referred to scientific studies that support this theory. There is something soothing about working with one’s hands. Knitting requires concentration, memorization and math, she said, which focuses the mind on creating, rather than dwelling. And, she adds, it’s rewarding to make your own crafts.

“We’ve been really fortunate,” Cross said, “because knitting and crocheting – anything with your hands – rides out recessions pretty well.”

Another key to Camas Creek’s success is a regular schedule of classes, as well as an intelligent ad campaign spanning several media. Among the daily classes is a free beginners’ knitting course every Saturday. Other sessions, including ones taught by the well-known instructor Janet Szabo, cost $20-$75.

The classes attract potential new customers and they also bring together a knitting community, of which Camas Creek Yarn is rapidly becoming a centerpiece.

“It’s something to do, something nice, and be part of a really cool community,” Cross said.

Similarly, Price has sought to reach out to her own like-minded community. She holds events and parties to attract clothing enthusiasts, while also maintaining consistent advertising and discount specials. The gatherings, like Camas Creek’s classes, bring potential customers to the door and help spread the word. Price recently expanded to include a men’s clothing section.

“You definitely have to be creative,” she said.

Ron Scharfe opened Uncorked, a wine and cheese specialty shop on U.S. Highway 93 in north Kalispell, in July of 2008. Like Price, he immediately came face to face with a recession that dramatically changed consumers’ purchasing habits. Fewer people came to his store looking for $30-50 bottles of wine, instead searching for a price range of under $20. Accordingly, vineyards shifted priorities to the less-expensive wines as well.

“We totally readjusted our inventory to accommodate our consumers’ needs,” Scharfe said.

As part of his quickly changing business plans, Scharfe brainstormed ways to better reach out to his customers. He created an e-mail list and asks customers if they would like to be included, giving him a cost-free method to tell consumers about deals and other news.

Scharfe also promotes a different 12-bottle mixed case every month at a discounted rate, sometimes losing money in an effort to get customers to his store. His cheese sales, he said, have remained steady. He encourages Flathead Valley residents to shop at locally owned shops.

“People have got to support their local businesses,” Scharfe said. “When you go to (the box stores), that money goes right out of the valley.”