November 21, 2009
What's Inside:
Recession spurs local entrepreneurship
Many small businesses start in tough economy
Many small businesses start in tough economy
Photo by Eric Keith / St. Joseph News-Press / Purchase this photo
Eric Clark opened his own automotive repair business, The Garage, after he was laid off and his unemployment benefits expired.
At the end of his unemployment benefits, 27-year-old Eric Clark took $4,000 out of his savings and opened an auto service shop. It was a dream fulfilled.
But the current economic climate has been particularly harsh on Main Street. Since he opened his small business this summer, there have been several days when not a single customer has walked into his garage.
“The economy sucks. It’s not the best time to do this at all,” Mr. Clark said Thursday at his business, The Garage. “But there are a lot of people trying this stuff. Like ma and pop shops popping back up, probably for the same reason as me: It’s hard to find a job.”
Economists say it will be the adrenaline of small-business entrepreneurs such as Mr. Clark that will help prevent a “double dip” recession. And since 90 percent of St. Joseph businesses have 20 or fewer employees, according to the St. Joseph Area Chamber of Commerce, they are central to an upturn in the local economy. Small-business owners are receiving notice in honor of Small Business Month in October.
Entrepreneurs are generally an optimistic bunch who historically have found a way to get through hard times. Disney, McDonald’s, Microsoft and Google were all founded in tough economic times.
The problem with this recession is that it has been especially prolonged, said Rebecca Evans, director of the Small Business Development Center in St. Joseph.
“If this had been a lull for three to six months, most of them could have pulled it off,” Ms. Evans said. “But the fact that this has been going on for 18 months now, a lot of the smaller shops just don’t have enough in reserve to ride it out for that long.”
She says this year she’s helped more small businesses establish themselves — a result of the recession spurring more local entrepreneurship.
This is a grim year for small-business lending. Skittish banks have slammed their vaults shut.
This year, the government’s top small-business lending program got loans to 25,000 fewer entrepreneurs than it did last year. The Small Business Administration says that’s because fewer applicants have been able to persuade weary banks that they’re creditworthy.
Mr. Clark said he tried to get a $30,000 business loan for his shop. A default on his student loan several years ago was a major blight. “The banks wanted me to put down money to get a loan. I was like, ‘If I had money, I wouldn’t be asking for a loan.’”
Ms. Evans said federal stimulus money was made available to small businesses experiencing immediate financial hardship in the recession — but only ones that were at least two years old.
For now, Mr. Clark takes no income home from his one-man operation. He relies on his wife’s income to maintain the household. He hopes to eventually expand, even hire an employee or two. But not now.
For small businesses willing to take a risk, there are factors working in their favor.
They can seize the moment while the economy is in flux and many larger companies are hunkered down and not taking risks. Also, since there are more people unemployed or underemployed, there is more available talent to hire.
For Mr. Clark, it’s a waiting game against the recession — for a time when consumer confidence rebounds, and he can finally turn a profit. He says the service trend now is for working-class people to drive their cars despite the rattles and clunks, as long it gets them back and forth to work.
And with all the worry, long hours and uncertainty he’s endured, Mr. Clark — a laid-off inventory specialist at Snorkel — has no regrets about opening his own business.
“The economy’s not good right now, but it’s a good time in my life,” he said. “Because if I was to go work at some factory, I’d be there probably until they fire me again or I got fired.”
Ahmad Safi can be reached at ahmadsafi@npgco.com.
This story has 12 comments. Click here to join in on the discussion.
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Perhaps there are St Joe residents who would be happy to give Mr. Clark a chance to work on their cars. Where is his shop located? I hope his business succeeds - it takes guts to start a business, especially while the economy is so bad. Good luck Eric!!!
To understand th sluggish recovery of the depressed economy, read the book FDR'S FOLLY; Roosevelt prolonged the Great Depression, and his would-be clone, Barack Obama , is making the same mistakes, but on a much grander scale. We may not recover from the disaster he is creating for a decade, if then.FDR was influenced by socialists; Obama is a socialist and has surrounded himself with the most radical kinds of socialists. To succeed in starting a new business, especially car repairing, one needs expertise in the craft and total honesty. Unfortunately, there are crooks who manage to make a go of auto repairing, and I found one in St. Joe who became rich . He confided to a friend that there are enough people in St. Joe that he could (bleep) each one and still stay in business.Where I live in California, they seem to all be dishonest, so it doesn't do any good to change mechanics. Maybe it is because I am a senior citizen, who knows?
it sounds like you, crashdive, are questioning this individual's honest and effort to make his way in the economy. surely in your rant against the president you must have simply over-stepped?
i concur with the first poster. good luck to mr. clark, and please post the location of his shop.
on a last note, i have hounded my son to get his college loans cleared up. those loans NEVER go away..... and the government will work with late payments. to all students, if you have outstanding student debt the worst thing you can do is not to contact the lender and work out a remedy.
Good luck. If someone will find out where this shop is, I would be glad to give him a shot at some repairs. Hmm, isn't the journalist supposed to run through the 5 W's....who, what, when, WHERE, why??? At any rate, I admire someone who can give a new venture a shot....
It just blows my mind that the media never covers the gorilla in the room: the billions upon billions of dollars of real estate that banks are sitting on in hopes they can, sooner rather than later, make SOME money back on.
What's going to happen when banks can no longer afford the costs of holding these properties? They are going to release them into the real estate market. Any economists here? Does ANYONE know what that will do???
It will CRASH real estate. Prices will PLUMMET. You thought they were bad now? That's BEFORE banks inundate the market with TONS of properties they can no longer hold on to, hoping the market will allow them to make SOME money back.
I am not worried about humans like Mr. Clark. He has shown that he will take his life into his own hands and I commend him for that. There will be businesses succeeding in this environment, but they will succeed on blood, sweat and tears. I'd bet dollars to doughnuts Mr. Clark can handle that tab. Even if his business doesn't do what he hopes, he has shown that he will figure out a way.
If I didn't do all my own repairs I would certainly allow him the chance to earn my business.
Congratulations, Mr. Clark and good luck.
Enduring lean times has been a challenge for a lot of us. The motto, "When the going gets tough, the tough get going", can certainly be applied to Mr. Clark's situation. Unlike the majority of people wanting a handout, he has taken the bull by the horns, so to speak, and courageously started a new venture. He deserves a chance to earn the business and support of the community. Blessings to him and his wife for their fortitude!
WHERE IS HIS BUSINESS LOCATED????
You did a Good Term by having this story!
These are real stories that we need to hear more often!
Thanks......Where is his business?
Good luck Mr. Clark. I hope you succeed. That said, there are already too many shops chasing too few repair dollars. It was that way before the recession and it is worse now. Auto repair is a tough business to make any money at in good times.
Awesome story ,hang in there Eric things will get better you will be nation wide as soon as big business fails ,SEEYA! ,midas,goodyear,firestone,ammco,dealerships, I'll be taking my car's to the garage!!!
First of all I would like to start out with giving all the glory to the lord. My life has been blessed in so many ways and this front page ad in the Sunday newspaper was no exception. Talk about great advertisement. Thanks to all who read and posted comments. Thanks for the prayers and the well wishes. Thanks for all the support from the community. Please everyone continue to support the small businesses (mine or not). If you’re looking for honest, affordable service with a mechanic you can trust come see me. Although the article did not give some key info we will get the word out. Give The Garage a try and you won’t be disappointed.
The Garage
1932 Frederick Avenue St. Joseph MO. 64501
(816) 344-8618
Mon-Fri 8-5 Sat by appt. only
Looking forward to keeping busy see you soon,
Eric Clark
good luck Eric, you will succeed in your endeavors if you stick with it. it will take a while, the best advertisement is word of mouth and you got a good start here. i wish you luck man. when i return to town i will see you. be patient.
I've had the pleasure of having Eric fix my car!!! I have had no issues with the work Eric has done. He was quick and much much CHEAPER than my original quote from Firestone. I hope everyone will take advantage of having an HONEST, hard working mechanic help them out with their cars!!
Thanks again,
Jessica