Among the survivors
A determination to succeed and a passion for the business are among the traits that help entrepreneurs keep their startups going the first five years

By DENNIS LARISON, Business Editor (Lancasteronline.com)

Getting a small business off the ground and keeping it afloat can be a daunting task in the best of times.

According to the Small Business Administration, less than 70 percent of new employers survive the first two years and only a little more than half — 51 percent — are still in business after five years.

Throw in an economic downturn on top of that, and it can be tough.

"The recession, that's been the scariest part," Darlene Umble said of her five years as owner of Olde Peddler Wools along Route 23 in Caernarvon Township. She celebrated her shop's fifth anniversary in September.

"The whole economic downturn is really a heartbreaker," said Jocelyn Wolff, owner of Apron Strings, which opened in the Hager Arcade in downtown Lancaster the same month Umble opened her shop.

"This past year, and even 2008, it was really scary," she said.

Yet, both Wolff and Umble said their businesses have been doing well despite the downturn.

"I have the most lovely group of loyalists who are extremely supportive," Wolff said. "They just really, really want to see the small [business] people survive."

Umble has her own loyal customers, although she has noticed many of them are not buying in the same quantity they once did.

"Maybe because of the recession, I haven't been growing as much as I'd like," she conceded. "[But] just going through a recession makes you more determined to figure out how to do well in spite of it."

That kind of tenacity is what pulls many owners through the startup phase of their businesses, said Jim Eshleman, whose own firm, Strategic Endeavors, 805 Estelle Drive, helps owners sell their businesses when they're ready to retire or move on.

"I see an awful lot of small businesses and ... how successful they are, and what does and doesn't work," Eshleman said.

Passion and commitment are at the top of Eshleman's list when it comes to qualities that enable entrepreneurs to survive. The owner has to believe in the business, he said, and then have the determination and persistence to see it through.

"That's the entrepreneurial spirit — people just refuse to fail and are determined they're going to make it," he said.

A recession can really put that spirit to the test.

Chris Ditzler, who will be celebrating the fifth anniversary of Slugger's Pizzeria, 701 N. Queen St., later this month, said he's seen a lot of other pizza shops come and go in the few years he's been in business.

"We were on an upswing until February of '08 when we started to see things level off and even drop off a little," he said.

"Once this recession is over, hopefully we'll flourish rather than just survive," Ditzler said. "But survival is the name of the game right now."

Staying focused
Successful startup business owners are usually the ones who stick to the basics and concentrate on what they do best, Eshleman said.

Ditzler, for example, grew up in the pizza business working for his uncle and cousin, Dave Groff senior and junior, at Papa Dino's.

Ditzler went on to become a computer systems analyst for eight years, a profession that he said required him to fight for his job every six months as contracts expired.

"At that point, I wanted to control my own destiny and [running a pizza shop] was just something that I knew," he said.

Umble and Wolff had also had other careers before opening their shops, both working for a time as high school teachers.

But Wolff, whose Apron Strings is a combination retail store specializing in gourmet foods, cookware and dinnerware, and a sandwich shop/salad bar, had previous experience in retail and catering.

"I have a decent retail merchandising background. I learned a lot from that," she said, working at such places as Boscov's, Bon-Ton and RB Shap.

"I do take a lot of time to hand-pick my stuff," she said. "I go to shows, and I taste everything before I put it on the shelf."

Originally in the back of the Hager Arcade, Apron Strings moved a couple of years ago to the front corner of the building when Wolff incorporated the Center City Deli into her business and started selling breakfast and lunch fare.

She said her interest in preparing food began when her husband, George, had a job that required him to entertain a lot, which in turn grew into a small home-based catering business.

"I really, really love food, and I love giving a party," she said. "Even now, I wake up and think there's really nothing I would rather do."

Umble, on the other hand, said she had never knitted a sweater before opening her shop, although she did have a passion for wool, dyed it at home and supervised a spinning and weaving club at Lancaster Mennonite High School when she taught math there.

Her passion, she said, is in seeing wool turned into something useful.

"I liked the fact that you could go to something so basic as a sheep on a farm and turn [its fleece] into fabric," she said.

Olde Peddler Wools carries almost everything that could be used in that process — from the fleece itself, to spinning wheels, to little bags of fibers, to yarns and the woolen fabrics used for hooked rugs. The shop also holds classes to teach people how to use the materials.

"I love it. I love everything about it," Umble said. "It's just that it requires a lot of work."

Conserving cash
Another quality that helps many entrepreneurs keep their startup businesses alive, Eshleman said, is frugality.

During hard times, businesses need to conserve cash to survive, he said, and they can do that by cutting expenses to the bone and finding ways to leverage their existing assets.

Ditzler, for example, credits cash control as being one of the biggest reasons Slugger's Pizzeria is still in business after five years — that and controlled growth.

"I saw a lot of pizza shops come in and drop a lot of money" promoting themselves, he said.

Rather than trying to fill his place up from Day 1, Ditzler said, he tried to build the business slowly, concentrating on putting together a good staff and getting workers trained so they could handle the crush of customers when that time came.

"If you're not putting out good food, people won't come back," he explained.

Another big thing, he added, is that he's always resisted the temptation to offer special discounts to drum up new business.

"When you do that, you tend to devalue your product," he said.

Still, holding the line on expenses has been difficult during the past couple of years when flour and cheese prices were going up, he said.

One thing he did do last summer when gas prices topped $4 a gallon was invest in a motor scooter for deliveries. Besides economizing on gas, the scooter had the added advantage of becoming one of the pizzeria's signature features.

"Obviously, the scooter doesn't make the pizza taste any better," Ditzler said. But inexpensive gimmicks like that, he said, can trigger a customer's memory and set Slugger's apart from its competitors.

Over the horizon
As gratifying as it might be to a startup business owner to survive the first five years, recession or no, that's only the first step to cultivating a successful business, Eshleman said.

He recalled one business he helped sell, in which the owner had been very good at taking a small staff of unskilled workers and training them to sell his products through business-to-business telemarketing.

"In a couple of years, he had built up 3,000 accounts," Eshleman said. "He had the skills to get that business off the ground [but] not the skills to take the business to the next level."

The next owner, he said, was able to build on that initial customer base by putting in a distribution center and carrying more inventory.

Some people, Eshleman said, are very good at starting new businesses and may end up with serial startups. Others can make the transition and grow a bigger company.

"You have to find what works for you and do it. It has to align with your skill sets," he said.

"As the demands change, if the owner can't step up and make the transition, it starts to get uncomfortable," Eshleman said. "They start to get bored or burned out, and that's how they know" it's time to move on.