Madeline M. Alpert
Runner-Up Winner
12th Grade
Walt Whitman High School
Bethesda, MD

    The Bethesda parking lot of Strosniders Hardware store on a recent Tuesday evening was packed with cars. Customers were streaming out, arms filled with cans of paint, handsaws and bird houses, with some carrying so much merchandise that workers had to help load their cars. From a vantage point along Arlington Boulevard , it might seem that the worst economic crisis since the Great Depression had somehow bypassed Strosniders. That impression would be mistaken, though. Behind the scenes, Strosniders owner Bill Hart is struggling to keep his employees working, his merchandise moving, and his stores open. The stream of customers on this day was due to one of the creative promotions Hart has tried in response to the recession--Ladies Night, when women get a big discount.

    It is one of the many individualized responses of local businesses struggling to keep at least even, if not profitable. This recession has disproved the old axiom that the Washington area is recession proof, and hardware stores in the area are no exception. In fact, despite the fact that hardware stores sometimes benefit from do-it-yourselfers during an economic downturn, sales in most hardware stores are down 10-20%. “This is probably the first time, and hopefully the last, that I have experienced an economic downturn this substantial in the Washington D.C. area,” says Hart. Yet he is holding on. So too are many other business owners in the metropolitan Washington area, men and women who agreed that times are tough, yet they remain hopeful for the future.

    To answer the question of how to effectively and responsibly respond to this economic crisis, I turned to the experts--business men and women who are working every day to keep their businesses alive, sometimes experimenting through trial and error to find what works as well as possible under the circumstances. Their stories and comments yield different examples, but all come down to this: Effectively and responsibly dealing with the economic downturn requires creativity, resourcefulness and tenacity. It means using those qualities to keep products moving. But it also means using those qualities to keep as many employees as possible in their jobs to avoid the vicious cycle in which layoffs lead to fewer people able to purchase things which leads to more layoffs. All those I interviewed also agree: Facing this crisis requires hope, and the belief that better times are just around the corner.

    Creativity, always a vital part of business, is needed more than ever during an economic downturn, when some people have less money and the rest are being more prudent with what they have. According to Hart, many times it’s just about “getting people in the door.” He has accomplished this through inventive concepts like Ladies’ Night, which was such a huge success he plans to make it a regular feature. He has also promoted in-store seminars where people can learn how to do various “do-it-yourself” projects. Some who show up for painting technique classes, for example, do not come intending to paint their homes right away. But some change their minds when they see what they can do. Others, when walking through the aisles on the way to the seminars, remember something they need or see something they just must have. But even if the seminar students buy nothing, the store is building loyalty. And loyalty, even during hard times, is critical in the relationship between businesses and customers. It is why so many companies have copied airline loyalty programs, and the trend has grown during the recession as businesses reach out to repeat customers with special prices, sneak previews of sales, and bonus offers.

    One of the malignant results of a recession is that people with money fear the future and so delay needed or desired purchases they can afford, thereby creating another vicious cycle. In good times, a business might survive and do well despite being a little sloppy, as it offers services and products to people ready and willing to part with their money. In a downturn, you must be always at the top of your game, providing the best service and price in a friendly atmosphere. Even then, you might have to add a clever hook to attract people who aren’t looking to spend money. That hook might very well involve advertising.

    Businesses that decide to cut advertising to reduce costs during a recession are making a mistake, said several business owners. Instead businesses need to be smarter about their advertising. Hart, for example, said that instead of printing their own circulars, as they had been doing during better times, they saved money by sending out the circulars provided by their co-op partners, True Value. Vicky Weaver of Weaver Management Group said she heavily marketed her company’s real estate management expertise. When that wasn’t as successful as she had hoped she got even more creative, and has branched out to provide residential and commercial design build services. “We are achieving a slow, steady growth,” she reported.

    Some types of businesses have been hit harder than others, with devastating results that couldn’t be avoided. In some cases, though, businesses have employed a bit of ingenuity and created a business opportunity by finding a new niche. For example, law practices that specialized in land development switched gears and are handling bankruptcy cases. “Companies that view our current economic plight as an opportunity can sometimes find a way to not only survive, but to thrive,” said Richard Rhodes of The Tenant’s Advantage in Bethesda. In his case, he turned his attention to the financially concerned who need help navigating the pressures of the economic downturn. More specifically, he has taken on clients who need to reduce costs and helps them renegotiate their leases. But again, faith in the future is needed. Rhodes explains that landlords are more likely to reduce tenants’ rents if the tenants in exchange extend the term of their lease. Thus, only business men and women who believe in themselves and the future are willing to take advantage of the lower prices, because they plan to be around for a long time.

    Businesses that are responsibly facing today’s challenge are finding creative ways to protect their workers as much as possible. It's not always possible to keep everyone fully employed. In bad times costs must be cut, and labor is usually a company's largest expense. Company owners I interviewed, however, said that before layoffs, they attempt to eliminate all other unnecessary spending, and in some cases this was enough to avoid staff cuts. Others said that when labor costs threatened to put them in the red, instead of cutting employees, they tried to dilute the pain for any individual and instead spread the hardship more evenly by cutting out overtime and reducing benefits. Some have even decided to forego profits to keep the workforce in place. Mimi Kress of Sandy Spring Builders, for example, said she has taken on projects just to cover overhead in order to keep as many employees as possible. This is a humane way to deal with a bad situation, but it is also good business. Assuming you keep the faith and believe that better times are coming, then you are in effect preparing for that future by holding on to a loyal workforce. Secondly, you are protecting the broader community, and thus yourself, by not feeding in to the vicious cycle of unemployment feeding on itself. Finally, you are keeping your business visible and continuing to build a client base even though the work isn't bringing you immediate profits. As Kress pointed out, even though in some cases she was reducing prices to the point of just breaking even, she was still getting clients “through the door”--clients who will return and who will hopefully recommend her company to friends and neighbors.

    When you watch coverage of the economic “crisis” on television, when you hear of the unprecedented levels of unemployment and despair and of people searching tirelessly for a job that never comes, it all seems pretty hopeless. But businesses like Tenant’s Advantage and Strosniders prove that the recession is not an automatic ticket to doom, that businesses can not only survive, but can even flourish. Of the half-dozen business owners I talked to, some were struggling, some were faring well. Despite coming from completely different types of companies, despite their varied experience with and response to the recession, they all shared one defining characteristic. They are all optimistic. They feel that the fate of their business is within their control, not the control of Wall Street or the GDP. They believe in their power to weather even the worst economic problems since the Great Depression. They believe that by making creative, smart choices and being responsible, they will endure the remainder of the financial downturn and come out of it stronger than they were before.