The Sentinel has profiled several family-owned restaurants and other small businesses which have thrived over the years, but this is often the exception rather than the rule for county small businesses, say many small business owners.
Periods of economic downturn are often devastating for small businesses, which lack the financial resources and customer base of larger chains and corporations. Recent years have seen the closure of several well-liked local restaurants, including the Ambrosia Grille in Rockville and Uncle Jed’s Roadhouse in Bethesda.
“All restaurants continue to struggle with the increasing costs for food and labor,” said Marshall Weston, Jr., President and CEO of the Maryland Restaurant Association. “Independent restaurants often find it more difficult to manage food costs because they do not have the volume buying power that chain restaurants can negotiate. In Montgomery County, the minimum wage increases over the next several years will drive up labor costs to the point that some independent restaurants will decide to close their doors rather than struggle financially.”
The hardships of Montgomery County small businesses are part of a national trend According to a national survey released earlier this year by Entrepenuer Weekly, the Small Business Development Center, Bradley University, and the University of Tennessee, 44 percent of all startup businesses fail within the first three years. Retail and construction industry businesses are among those with the highest failure rates; in both categories, only 53 percent stay in business after four years.
“We’ve done well so far, and my rent’s very fair, but there are challenges,” said Bill Moore, owner of the Grille at Flower Hill, a restaurant and bar which opened last year and was profiled by the Sentinel in April. “The holidays are hard – in Montgomery County, everyone leaves and goes on vacation.”
Restaurants and other hospitality businesses are not the only ones who struggle. Mary Jefferson, owner of Make it Count Marketing in Rockville and communications chair for the Women Business Owners of Montgomery County (WBOMC), identified a number of obstacles which small business owners face in the modern economy. Chief among these, she said, is a lack of time.
“As with any business, we just don’t seem to have the time. Especially since we are chief, cook and bottle washer too,” Jefferson said. “Finding time to work on my own business is hard. I have to make a concerted effort to schedule time on my calendar to do things for my business. I’m in the process of redesigning my website and it took me months to get the copy written. Whereas if I had been my own client I would have had it written within ten days.”
Jefferson said other obstacles include a lack of good administrative and contracting help and an unfortunate tendency among small business owners to become complacent during profitable periods.
“You have to be organized and know that you can’t abandon marketing and business development during the good times,” Jefferson said. “Networking is just as important then as when you were looking for new customers.”
Overhead costs were the primary reason that one WBOMC member, Wendy Epstein, chose to significantly downsize her business. Epstein is the founder and CEO of All Ways Travel, a travel agency which specializes in booking vacation packages. After 24 years of operating in a brick-and-mortar building on Democracy Boulevard, Epstein chose instead to operate her company alone out of her home.
“Travel agencies are unique in a lot of ways, but we still had to hire a payroll company and report new hires,” Epstein said. “I didn’t have the time or the patience to deal with that. When you run a small business, you want to spend your time running your business, not filling out paperwork.”
Epstein said in a time when most trips are booked online, the expense of having employees was too great, and that commercial rents in Montgomery County were “ridiculously high.”
Glenn Flaherty, owner and instructor at the School of Music in Rockville, said he had enjoyed a generally positive relationship with the city and county governments during the school’s ten years of operation, but faced occasional frustration due to a lack of communication and specifics from agencies he dealt with.
“When we tried to get to them about renewing our business license, our check wasn’t cashed, which we found out after we mailed it in, but we didn’t know why it wasn’t cashed,” Flaherty said. “We never got a phone call back. A few months later, we tried to figure out what the problem was, and they said they had forfeited our business name because we hadn’t paid a tax on fixtures. Even when we opened, the inspector had some ordinance that not even the contractor or the landlord had ever heard of. They came to inspect the property and said we didn’t have a dropped ceiling permit.”
Flaherty said several of his neighboring business owners had related similar stories of unresponsiveness and lack of clarity when dealing with the county. The high cost of living, he said, was also an obstacle for his business.
“I’d like my employees to be able live nearby so that they can always be on time for lessons,” Flaherty said. “Unfortunately, it costs a lot to live in Montgomery County.”