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Small businesses optimistic for growth: Keys to successful entrepreneurship include good planning, adaptibility

Posted: Friday, February 18, 2011

The small-business climate is slowly warming on the central peninsula after a couple tough years, according to the heads of several organizations designed to help local businesses.

Leaders of local chambers of commerce and a small business development organization say a downturn that started in 2009 is showing signs of recovery, giving local business owners a reason to be cautiously optimistic.

The local economy fared better in the last few years than many other parts of the United States, but businesses felt shockwaves from the Lower 48's recent recession. Tourism, a mainstay of the Kenai Peninsula economy, was particularly jolted, according to Michelle Glaves, executive director of the Soldotna Chamber of Commerce.

Tourism hit a high in 2008, only to crash in 2009 due to the Outside recession and cruise ship cancellations, says Glaves. Many businesses can survive one bad year, she says, but when tourism levels did not improve significantly in 2010, casualties mounted.

Glaves says businesses that marketed heavily and targeted quality customers "have weathered the storm." Fishing guides and lodges that relied on the overflow of others did not fare well.

"There are a lot of them that went out of business," she says.

Although tourism has been down the last couple summers, interest in vacationing in Alaska has never waned. Requests to the Soldotna Chamber of Commerce for information about visiting the Kenai Peninsula have remained steady, says Glaves. She doesn't expect a sudden influx of visitors, but research suggests 2011 will start an upturn.

"There's no magic that's going to make it come back soon," she says. "It's steady as she goes."

In Kenai, the small-business climate shifted last year with the opening of Walmart in March. One year after opening its 210,000-square-foot store, the retail giant is receiving mixed reviews from local business owners, according to Kenai Chamber of Commerce Executive Director Carol Bannock.

Businesses that compete directly with Walmart are feeling the impact of the competition. But others are benefitting from the increased traffic the store attracts, says Bannock. Shoppers from around the Kenai Peninsula who used to drive to Anchorage in search of deals are starting to change their habits, thanks to large box stores like Walmart, Lowe's and Home Depot.

"Kenai has become a destination shopping center," says Bannock.

Both Bannock and Soldotna's Glaves emphasize that residents can significantly help the local economy by supporting small businesses. Both chambers have invested in "buy local" campaigns that encourage central peninsula consumers to spend their money here rather than in Anchorage or online.

"The businesses that we go into are the same ones that support our nonprofits or your kid's T-ball team," says Bannock. "Every time we shop off the Internet we decrease the opportunity for them to be successful."

After one year at the helm of the Kenai Chamber, Bannock notices growing confidence in the local economy. The recent opening of an automotive repair business and an office supply store, along with the expected opening of a phone business, are positive signs after a stagnant year.

"When you see these smaller businesses come in, those are the indicators there's a little optimism out there," she says.

Bryan Zak, director of the Small Business Development Center's Soldotna office, concurs with Bannock's assessment.

He estimates there are 30-40 small businesses that have opened their doors on the Kenai Peninsula in the past year.

"I'm maxed out with clients coming in," says Zak, who provides free counseling and training for small business owners through a government-financed program.

Starting a successful business in the current economy is not easy, but opportunities are available for entrepreneurs who do their homework and understand changing business trends, he says.

Businesses have to embrace the World Wide Web, says Zak. Creating an effective website, tapping into Facebook and increasing Google ranking are critical.

"Businesses that adapt to the new environment have been very successful," says Zak.

The downturn in the economy also has created opportunities for those able to take advantage. Today's low interest rates allow owners to borrow money and invest in their business at a minimal cost, says Zak.

Another trend Zak notices is an increase in out-of-state residents coming to the local area to start a business. Because the local economy did not get beat up as severely as many economies in the Lower 48, the Kenai Peninsula is an attractive destination for business owners looking for a fresh start.

In addition to his position with the SBDC, Zak also sits on the board for the Kenai Peninsula Economic Development District, an organization that keeps tabs on local economic trends. After a couple tough years, Zak says the EDD board is optimistic about the peninsula's economy.

"We really started to see the economic picture be bright and shiny," he says.

The recent news that ConocoPhillips will mothball its liquefied natural gas plant in Nikiski was a blow, but he remains hopeful the peninsula will continue to rebound and absorb the hit.



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