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Weathering the storm
A few months after Richard Cohen launched his catering business in 1999, his phone was ringing off the hook.The dot-com boom was in full swing, venture capital was flowing into Northern Virginia and giddy CEOs were throwing lavish corporate parties just about every night of the week.
All of the fun came to a screeching halt when terrorists struck the United States on Sept. 11, 2001.
"After 9/11, everything around here just stopped," said Cohen, owner of Oakton-based Clever Catering. "Most of what I do is corporate catering, and I don't think I took a single order for 30 or 40 days [after 9/11]. Nobody was traveling, nobody was hosting business conferences, nobody was throwing parties. It was definitely a scary time."
As frightening as things were seven years ago, Cohen fears the current economic slump might pack an even bigger punch. Like many other small-business owners across Fairfax County, Cohen is in a daily battle against spiraling oil prices, a rudderless housing market and crumbling consumer confidence.
For Clever Catering, that's meant fewer incoming calls, smaller orders and a cutback in the number of servers and drivers.
"In hindsight, 9/11 was relatively short term," he said. "It was a hard hit, but we jumped on our horses and went back to work. This time, I'm getting hit from all sides. My food costs are up. My fuel costs are up. Everything's up, and nobody can tell me when or if it's coming down."
Although Fairfax County doesn't keep year-to-year statistics on business closings, evidence of the shaky local economy can be found in the growing number of vacant storefronts. It's difficult to drive through a shopping center in Northern Virginia without coming across a "For Rent" or "Space Available" sign. You can find dozens of them in Herndon, Reston and Springfield. Same goes for Fairfax City, Chantilly and Vienna.
Statewide, the number of businesses filing for bankruptcy with the Eastern District Court of Virginia rose from 8,784 in 2006 to 13,858 a year ago. This year's bankruptcy filings are expected to come in just short of 20,000.
Cathy Wheeler, who counsels hundreds of small-business owners as president of the Community Business Partnership in Springfield, said many of her conversations involve people who wonder whether they'll be in business a year from now.
"The money's drying up for a lot of people, and they're worried," Wheeler said. "Whether you're a small guy looking for a $10,000 loan or a big guy looking for a couple million, it's much harder to get banks to lend that money than it used to be. When you don't have money, you can't stay in business."
Although only a handful of the businesses Wheeler deals with have shuttered their doors, she said the next three to six months could tell a different story.
"We're just beginning to see the outer edge of this thing," said Wheeler, who created the Community Business Partnership in 1995. "I'm starting to get a lot of calls from [business owners] who are struggling with their own personal mortgages. That's a real concern because it's difficult to fight both those battles at one time."
Another concern is that fewer people are attending training sessions designed to help business owners develop survival strategies in tough economic times.
"So many businesses wait until things reach a critical mass before seeking help," Wheeler said. "If you're having trouble, you need to hear from others who have been in your shoes. Whether you're starting a new business or trying to market your product to the federal government, there are people out there who can help."
Larry Bearce isn't one who needs help starting a business.
Since opening his first Music Store near Fairfax Circle 40 years ago, Bearce has expanded to six locations across the region and has weathered his share of economic tsunamis along the way.
"I've been through a few [downturns] and each one is a little different than the last," said Bearce, who owns stores in Arlington, Burke, Chantilly, Dale City, Lorton and Reston. "We're being hit pretty hard right now. This summer, we had our worst retail sales since 1992. Last Christmas season was bad, too."
Knowing he couldn't go head to head with big box stores like Target and Best Buy, Bearce has placed less emphasis on new instrument sales and more focus on music lessons and rentals.
"Fortunately, I'm somewhat insulated because I teach and rent the instruments," he said. "It hasn't been a great year, but we're still open. I'm pretty sure we're the only [independently owned music store] left around here."
Whether one's business involves selling guitars, beds, carpets or anything else, chances are 2008 wasn't a record-breaking year on the sales front.
Sergio Domestici, manager of Vienna-based Bonaroti for more than 26 years, says it's difficult to keep track of the restaurant closings around town.
"That's Amore closed and a Chinese restaurant right next to us just went out of business," Domestici said. "It's a tough time to be in the restaurant business because everything has gotten so expensive. If we raise our prices, people won't come. If we keep our same prices, we lose money."
When asked if he'd been through any similar stretches since Bonaroti opened in 1982, Domestici didn't hesitate.
"1989 and 1990 were bad, but not like this," he said. "The only reason we're able to survive right now is that we make excellent food and we have loyal customers. We are very lucky to have both those things."
Wheeler agreed that quality service and a loyal customer base are critical components in weathering an economic storm.
"Solid businesses tend to survive in bad economic times and shaky businesses don't," she said. "This isn't the time to panic and start making major changes. We've been through this before. It may take six months, it may take longer, but history tells us that it's going to turn around."
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