Even as they labored to attract new customers at the 10th Annual Tri-Chamber Foothills Community Business Expo, local business owners said they are adjusting to a new economic reality in which the customers are frugal and the lenders cautious.
"I think with this economy it is never going to go back to where it was," said Craig Fisher, a La Crescenta-based electrician. "I think people have learned to save."
His business has slumped about 30% amid the recession, Fisher said. He had to lay off three of his four employees, and now does much of the manual labor himself.
Liza Morelli, owner of Tujunga-based Bonners Party Rentals, said her business dipped by as much as 50% during the peak of the recession. There have been modest gains in recent months, she said, adding that she was at the expo to network with potential customers.
"People are just holding onto their money," Morelli said. "A lot of people have lost their homes they're not entertaining as much…A lot of people are out of work so the first thing that goes is the luxuries."
National consumer data supports the local anecdotes about frugal customers. According to the U.S. Commerce Department, the personal savings rate among Americans increased to 6% in the second quarter this year. At the height of the housing boom in 2005, the personal savings rate hovered around 1%.
And while an increase in personal savings holds promise for long-term stability, it spells short-term misery for the American economy, which is driven, in large part, by consumer spending.
Nevertheless, a lack of consumer confidence isn't stopping business owners from trying to coax customers to loosen their grip on their wallets. They are cutting prices, throwing in freebies and investing in a lot of face-to-face time at events like the Tri-Chamber expo.
"It is a good way to network with your customers," Morelli said of the event, which took place at Verdugo Hills Hospital last week. "You see a lot of familiar faces…It is a good way to remind people that you are out there."
Jackie Walls opened her wig shop, Jackie's Hair A Go Go, in La Cañada Flintridge one year ago after being laid off at Countrywide Home Loans. Much of her business is with people who have medical-related hair loss, and she sees her product as a necessity. It is just a matter of building her brand, she said.
"I am starting to see a very dim light at the end of the tunnel," Walls said. "I am just coming on my first year [of business]. I am hoping by this time next year my foundation is built, and I am hoping to open more stores. I hope to open maybe in Burbank, Pasadena and Glendale."
Leonard Ghazarian, who runs La Crescenta-based Caspian Services, a small business Internet company, said he strives to meet customers' price ranges.
"A lot of people don't have the budget anymore to do the big jobs," Ghazarian said. ""People come in with small budgets. We're still able to help them out. You try to throw some free stuff in there; everyone loves free things."
In the long run, Fisher said, a loyal customer base and a good product is what will sustain a business.
"We are all getting along still, we are still moving along OK," Fisher said. "A few businesses have really struggled, but most of them are still surviving. We are a close knit community up here, so we do patronize our own."