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Small Business, BIG WORRIES: Recession Makes Staying Afloat Harder Than Some Think

Small Business, BIG WORRIES: Recession Makes Staying Afloat Harder Than Some Think

Robert Boyer | Times-News, Burlington, N.C.

Keeping a small business afloat is a tough task during the best of times, but espe cially so in a sluggish economy.

Few folks know that better than Diane Heath, the owner and president of Custom Made Inc., a Gibsonville company that makes signs, banners, decals, displays and other items for businesses. “What has been … the most challenging thing for me is that it’s lasted so long this time, the length of this recession,” says Heath.

The last year or so has been particularly hard on Heath and her company, which she founded in 1991. At one point, she came close to closing the doors to her facility at 106 E. Railroad Ave., but Custom Made is now turning a modest profit.

The road back to profitability has been a twisting path, though.

In late 2007, as she noticed the country heading toward recession, Heath decided to expand her business to increase sales so she could generate more cash to upgrade her printing technology. To accomplish this, she hired another salesperson to head up the push and dedicated an existing employee to marketing.

The effort came amid a burgeoning world-wide financial crisis and ultimately “didn’t work out” Heath said. The salesman quit, and Heath was left with a half-exhausted line of credit.

By the end of 2008, a sharp drop in orders and shrinking cash flow had put her behind the eight-ball with suppliers and contemplating layoffs or selling out.

As 2008 became 2009, Heath took a hard look at expenses and began cutting nonessentials.

Strong sales through the first three months of this year seemed to signal better times. But the reprieve was only temporary. “The second quarter went in the tank,” she said. “By then I had maximized my line of credit.” Heath delayed cutting employees because she "didn’t want to feed what had been going on out in the economy. “I knew that the job market was going to be really tough, so I held on a few more months than I should have,” she said.

Toward the end of the first quarter, Heath cut expenses to the absolute bone, but still had to lay off three employees in April.

The moves freed up some cash and put Custom Made on a more solid footing, but left unsolved a credit-line problem.

That made buying parts and other supplies tough, Heath said, because suppliers in this economy want cash up front.

“Cash is king,” she said.

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