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Sunday, April 19, 2009

New, bold businesses test the waters despite economy

Alison Songer was well into her business plan when the economy started tanking last fall. She and her husband, dentist Mark Songer, had already found a place to rent and had ordered thousands of dollars in inventory for their new shoe store in North Chattanooga, N2Shoes.

So they decided to go for it anyway.

The store opened in February, and despite weak sales across many retail sectors, the shoe business has been great, said Mrs. Songer, who moved to Chattanooga just months ago from Atlanta with her husband and 7-year-old son.

“Our family and friends think we’re a little crazy because we’re always coming up with something like, ‘Hey, let’s move,’ and ‘Hey, let’s open a shoe store in the worst economy,’” Mrs. Songer said.

Crazy or not, the Songers are not the only entrepreneurs willing to taking a chance with a new venture when many of the economic signs say stop.

A surprising number of people contacted the Business Development Center in March to inquire about opening a new business inside the incubator, said Kathryn Foster, director of the BDC. January and February were slow, she said, but last month started off with a boom.

“Some are maybe getting laid off and deciding they can do this on their own. We have seen some of that,” she said.

But the majority of interest she is seeing has been from young entrepreneurs under 30, which she attributes to a surge in the past decade of colleges and universities offering entrepreneurship classes.

“Maybe they feel more confident, maybe they are not trusting the economic climate that’s out there as far as working for somebody else, I don’t really know,” she said. “We are seeing a lot of young entrepreneurs getting into the market in a variety of areas.”

In the past month, she has met with a technical services company, some environmental engineers, and a firm of diversity advisers, all of which want to set up shop in the incubator, which offers below-market rent and other office services to reduce a start-up’s overhead for the first three years.

Vickie Haberbosch met with Ms. Foster earlier this month to discuss expanding her Athens, Tenn.-based home care business into Chattanooga. The business, Compassionate Homecare has grown rapidly despite an unfavorable climate.

Her business provides medical supplies to the elderly and disabled and is at an advantage because it is not driven by the economy, she said.

“It doesn’t matter what is going on in the economy, they are still going to need our services,” Ms. Haberbosch said.

She opened the business in Athens eight months ago with two employees and now has 45. She felt the business was at a point where she needed to expand, and being able to set up shop in the incubator gave her the confidence she needed to make the move.

“Kathryn watches out for tenants, to see if she sees of struggling,” she said. It’s like almost like you have a built-in mentor,” she said.

Ms. Haberbosch knows people are losing their homes, but those people are not elderly and disabled — who sometimes depend on government checks.

“If our country was hurting that badly, we would see cuts in that area,” she said.

Mrs. Songer credits her stores success in the past few months to an affordable price point — shoes from $20 to $140 — and a market that was ready for the lifestyle-type brands her store is carrying, such as Born, Simple and Tom’s.

Or, she said, people could be excited about the weather and the positive economic changes in the news lately.

By bringing new brands to the area, Mrs. Songer said the store captures the essence of what it is that entrepreneurs do, which is take risks on new and different ideas.

“I don’t know if confidence is increasing, I can’t attribute it to one thing,” she said. “I think it’s a combination of things, maybe people are feeling are excited about having options for footwear.”

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