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Local companies remain optimistic, cautious

This story appeared in The Wichita Eagle on Nov. 16, 2008.

To meet the demands of a tightening economy, an Indianapolis business recently decided to cut out $130 worth of morning doughnuts, vanilla coffee creamer and bottled water for its employees.

The plan was reversed after the hungry employees agreed to work a little extra to pay for the goodies.

A restaurant in Massachusetts now has a menu of "recession specials," including spaghetti and meatballs cut to $4.99 from $8.99.

Just part of the attempts by small businesses around the country to survive the economic downturn.

A check with nearly 20 Wichita-area small businesses from a variety of industries didn't turn up anyone going to extreme measures to cut costs.

"We're still drinking imported coffee," said Troy Thompson, owner of Sharpe Printing.

But local business owners remain cautious and are looking for creative ways to cut costs and stay on top of their markets. That includes keeping inventory down while seeking special deals when they do order.

"You have to sharpen your pencil a little more to get the bid," Thompson said.

Cautious, optimistic

No one was suggesting Wichita is immune to the economic slump that has gripped the country.

But several business owners noted that the overall conservative nature of the state helps businesses survive tough economic times because they generally run a lean operation.

"We're lucky we live in Kansas," said Ron Koepsel, founder of Arko Manufacturing, which produces aluminum screens, windows, patio covers, carports and awnings. "I think people in Kansas run their stuff tidy and not as crazy."

A majority of the businesses contacted followed the refrain of Ruth Rutschman, co-owner of Bicycle Pedaler.

"We're cautious, but optimistic," she said.

Even with the economy reaching a critical stage this fall, Rutschman said this will be the Bicycle Pedaler's best year in its 28 years of existence.

Pete Schrepherman, owner of Johnstone Supply, a heating and air conditioning wholesaler, said, "Our feeling is it's business as usual until we see something on the local scene that's really going to hurt us.

"We're not going to go out on the limb, but we're not going to take any major steps backward."

Party on

Apparently the local economy isn't in such dire straits that it has become a party pooper.

Ray Spears, owner of Spears Catering and Spears Restaurant, said his operation is doing well and has the same volume of business as a year ago.

"I keep waiting for a drop in bookings because I know a lot of the companies seem to be tight," he said. "I'm on the edge of my chair, but so far so good.''

David Coyle, who co-owns In the Bag Cleaners with his wife, Angela, said the holiday party is "not one area I'd cut. It means too much to us."

While the parties may be on, some are being downsized.

Employees of Tillie's Flower Shop usually gather at a hotel and have food catered for their holiday party. This year, owner Ken Denton said the party will be held at a neighborhood activity center and employees will be asked to bring some of the food.

"You want to keep the employees together and happy," he said. "You don't want them to think, 'Oh, this is a terrible time.' "

One of the reasons Coyle is insisting In the Bag Cleaners continue with its holiday party is because his business has more than doubled in size since buying out 11 Best Cleaners' locations last April. His employee count has shot up to just under 100.

"We still try to give it a family feel," Coyle said.

Discretionary income

Restaurants around the country have reported a drop in business as discretionary income dries up.

Scott Redler, chief executive officer for Wichita-based Timberline Steakhouse and Freddy's Frozen Custards, said some customers who normally eat at an upscale restaurant have shifted to casual and casual diners have gone to quick casual.

"For that reason, our Freddy's are very, very busy right now," Redler said. "Our Timberlines are staying real steady. We're not as impacted as much as the rest of the country."

He said Timberline will begin offering meat loaf on its menu in about a month for a lower-priced alternative. But he added his restaurants won't reduce quality or portions.

"Anyone who does that is making a bad long-term decision," Redler said.

The florist industry is a tough business in the best of times.

Of the 40,000 florists in the United States, Denton of Tillie's said only about 10 percent of them make any kind of profit at all.

"You have to keep your belt pretty tight if you want to make a profit," said Denton, who has run the 132-year-old family business since 1975.

He has reduced his work force in the past year, dropping about seven to the current 35 employed at the two stores. Tillie's has also reduced advertising and increased e-mail marketing.

At the same time, Denton said he has had to spend more on buying a broader range of flowers direct from the growers because local wholesalers have cut back.

To respond to those costs, Denton said he has shifted to a more flexible approach by running specials on bouquets for a few weeks at a time instead of for several months.

"So we're constantly looking at the market for a better value," he said.

Long-range planning also helps, Denton said.

"We haven't taken on debt for some time," he said. "It didn't take a mastermind to see what was coming."

Others business owners are also keeping a sharp eye for ways to react quickly with market shifts.

"If we see volume changes, we'll adjust,'' Spears said.

"We seem to be insulated so far, but that can change quickly."