News came out today that business bankruptcies in Saint Louis have increased some 16% this quarter. This is apparently below the national average, but still a huge chunk of revenue and jobs going out the window.
I’ve spent some time over the last few weeks talking to business owners about their overall financial and economic situation. As expected, nearly every industry is down for the year. Overall, I’d put the average drop at right around 30%.
A 30% downturn in revenue can really hurt a business. One business was down over 50%. Ouch.
However I did also speak to a few businesses in the area who are holding about even from years past. And holding even when all their competitors are down is actually pretty good. It’s not great, but at least it’s not bad news.
Others are having record years. One owner I spoke with was on the brink of going out of business just a few years back, and is now having their best year ever.
Some businesses, such as outdoor industries like roofing have been hit with a double-whammy – the economy and the weather. The entire month of October, usually a good month for roofers, was doused with rain. In the month of November they had to play catch-up with the contracts they did secure, but now the weather is typical December weather, and they’re going into 2010 on a significant loss.
I also spoke with an owner of a small swimming pool installation company. He said normally they did between 4-8 pools a year. This year they did 1 install, and their bottom line has been hit bad. His company had recently purchased a new truck to help with their growing client list when the bottom fell out. Now they’re having trouble just staying afloat (rimshot, please!).
So what did the businesses that weren’t down do that was different from the others? From what I could surmise, these businesses acted proactively on their marketing strategy as soon as they noticed the downturn. Whether it was an increase in direct mail, SEO or other forms of marketing, they saw their income dipping and did something about it.
It’s one thing to talk about a coming storm, and it’s another thing to get out and “secure the premesis”. If your business is simply hoping it blows over, while the windows are shattering and the roof is peeling off, you may be one of the 16% or more that files next quarter.
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