Coping with the economy: businesses speak out

Signs of an economic slowdown began appearing in 2007, but Elizabeth and Chris Patton, owners of Gardnerville Spa & Pool, wouldn't have guessed that in another year sales from their store in the Stratton Center would drop to a literal standstill.

"Spas sat for months and months, and there were no sales," said Elizabeth. "There was no foot traffic. It was just dead."

Gardnerville Spa & Pool has been around since 1989. Chris joined the company as a technician in 1996 and bought the operation a decade later.

"I wanted to build something on my own," he said.

But at the beginning of 2008, when sales came to a screeching halt, Chris and his wife were faced with some tough choices.

"All the money was going to the store," Chris said. "My service work was the only thing keeping it going."

The Pattons decided then and there to close the storefront, and to move the business into their home in the Gardnerville Ranchos. Unfortunately, once they followed through with the decision, a lot of their customers assumed they had gone out of business.

"We lost about half our customers," Chris said. "They didn't think about calling. They just saw the place empty and thought we were gone."

"They had no idea where we were at," said Elizabeth, "and even if they could find someone else, they might not have had the money."

It's no secret that since the end of 2007 the economy has been contracting rather than expanding. Businesses both big and small have had to cut costs, retool, and find ways to weather the downturn.

In the case of the Pattons, it was giving up their showroom, 12-14 display spas, and partnering with suppliers and wholesalers in Reno.

The reorganization has allowed them to continue selling spas, chemicals and other pool accessories. They've also been able to continue their service and repair. But in order to do so, Chris has had to hit the road and cover great distances.

"I've been from Reno to Bishop. I've been out to Winnemucca," he said. "I'm taking whatever I can get."

Another cut the Pattons made was health insurance.

"When you choose between feeding your family and health insurance, you choose feeding your family," Elizabeth said.

As a consequence, the couple drained their savings paying for an emergency tonsillectomy for one of their two children.

"The hardest part is not knowing if you can pay your bills," Elizabeth said.

Elizabeth is training to become a lab technician, hoping the job will provide not only supplemental income but health insurance.

"I can't complain tons and tons," she said. "We've been blessed. We do have food on the table. God has provided."

Other people might not feel as fortunate as the Pattons. Unemployment in Douglas County reached 11.4 percent in the month of February. More than 2,600 people are out of work, according to the Nevada Department of Unemployment, Training and Rehabilitation.

But some companies are trying to find alternatives to layoffs.

Bill Henderson, sales and marketing director of Carson Valley Inn, said the hotel has reduced its workforce by 15-20 percent.

"But we've accomplished that almost entirely through attrition and seasonal cutbacks," he said. "From our standpoint, the function of our business is much different than a year ago."

Henderson said the recession has inspired new ways of thinking.

"We've had to question and cut back on expenses while always trying to keep away from areas that affect customers," he said. "For example, we have a lot less general or image advertising. We'll advertise something specific, or take advantage of co-op opportunities."

He gave the example of partnering with local golf courses to promote package deals. But, at the same time, he said promotion has its limits.

"Our focus is on taking care of existing customers," he said. "We're always looking for new customers, but we're also realistic about what we can accomplish through advertising and promotion. We want to maintain a quality product."

Henderson said necessity plays a huge role in streamlining operations.

"Now when something breaks, instead of saying, 'we've always done it that way, lets figure out how to replace it,' we ask if we really need it, and the things associated with it," he said. "We haven't renewed a couple of billboards. It's nice to have the images, but do we absolutely need to have them? Do they affect the customers directly? You start making decisions like that, and it's a huge amount of money."

Although positive about some of the changes at CVI, Henderson does not underestimate the severity of the recession.

"I've never seen anything like this that has affected the full spectrum of the community," he said. "Carson Valley Inn will survive. But the simplest thing, what needs to happen, is people need to start moving back in again, and we need to see all the people in the building industry back to work. When they're back to work, every little trickle-down occurs."

Perhaps no other industry has felt the effects of the housing slump more than the real estate industry. Realtors across the Valley have had to reinvent the way they do business.

"I've been looking at expenses and looking at all we don't need," said Marsha Tomerlin, owner of Coldwell Banker Itildo in Minden. "I used to want to throw money at problems to solve them. Now, I've become extremely practical."

Like Henderson, Tomerlin has decided to reduce advertising.

"We kind of had a big ego, like everyone needed to be on a magazine cover," she said. "Now, we're working with buyers and sellers through networking, staying in contact with the people you know, those you've done business with and have already established relationships with."

Tomerlin said the economy has motivated her and other real estate agents to improve their customer service skills.

"It's called working with your sphere of influence " from the gal bagging groceries, to the dentist, to whoever might be a buyer or seller," she said. "I think we're much more sensitive to people's needs."

Tomerlin believes the worst of the crisis has already passed. She said business is steadily increasing as more federal funds become available and more people are able to qualify for traditional loans.

"I think we've hit the bottom," she said. "If anybody is thinking about waiting another month or two to buy a dream house, think twice, because people are looking and buying."

Although sales may be picking up, Tomerlin said the market is still far from where it needs to be.

"There are three major companies in town that are hoping business increases, that have tremendous overheads," she said. "I remain an eternal optimist, as any person in sales must. I'm looking for the rainbow, and that's my focus."


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