Horizon 2010: Myrtle Beach area businesses hanging on (with video)

The past few years have been exhausting and difficult for Kevin Mishoe as he laid off employees and worked longer and harder to keep his janitorial business afloat. He's not sure it's going to get any better this year.

"It's been really tough," said Mishoe, the co-owner of MEMA Services Inc., which has cut its staff by 60 percent and now has three employees. "I do believe it's going to continue to be very challenging. ...This is going to be a year that separates the survivors from the non-survivors."

Though many economists say the worst is over, the economy isn't immediately snapping back, with a slow and steady recovery predicted in 2010. That means businesses that have been struggling, such as Mishoe's, can expect another trying year.

To survive, businesses have to find new customers, because consumer spending has dropped, said Don Schunk, a research economist at Coastal Carolina University.

"There's still frankly too many businesses locally that are trying to grab their piece, grab their share of the total revenue," he said. "I do think that we'll continue to see businesses closing this year and maybe into next year."

There will be closings until there is a balance between spending and the number of businesses that can be sustained by that level of spending, Schunk said. Businesses have to be more efficient, find ways to cut costs and be smart about marketing, he said.

"Some businesses just might not make it through this year or this summer and they'll have to throw in the towel," Schunk said.

Last year, several businesses couldn't hang on any longer. Studebaker's nightclub, a Myrtle Beach icon on Kings Highway, closed Jan. 9 after more than 28 years in business, citing the poor economy and a slow summer in 2009.

Working efficiently

to gain an edge

Despite the challenges, Mishoe is optimistic that his company will carry on. He's looking to diversify the services MEMA offers, beyond the commercial glass cleaning and restoration the business has focused on in the past.

"You really have to beat the bushes now to find customers," Mishoe said. "What we've had to do is take another look at the market ... anything that would broaden the business."

Wayne Hickey, a self-employed insurance salesman, is also working to give himself an edge over the competition.

"I decided to broaden my levels of expertise," he said. "I'm trying to cover more insurance lines and try to market a little bit stronger locally."

Consumers are more cautious about spending and he has to talk to more people to get the same amount of business as he did a few years ago, Hickey said.

"It's a tough market out there ... because of the economy a lot of people don't have money for insurance," he said. "You've got to be much more persistent."

For Greg Hyman, it's not only about working longer hours with fewer employees, it's also been about finding innovative ways to do business and cut costs.

Hyman Vineyards in Conway is spending less on advertising but doing more wine tastings to directly reach customers, finding ways to use the same piece of equipment for more than one job and reorganizing the bottling plant so that fewer workers can get the job done. The vineyard is also looking at developing new products to use all parts of the grapes it grows.

"We are just going to have to make sure everything is done correctly the first time and we don't spend any unnecessary money," he said. Hyman, who grew up on a farm, said he knows what it's like to struggle through an economic downturn.

"I'm a survivor. I know what it is to have down years," he said.

The company has about 25 percent fewer part-time and 50 percent fewer full-time staff than a few years ago, he said.

"We're just doing more work," Hyman said. "We're cutting corners where we can without affecting quality."

Reaching out for help

Over the past year, many businesses have turned to organizations such as Grand Strand SCORE, a nonprofit that offers mentoring, training and counseling to small businesses.

SCORE saw an influx of business owners looking for help in the past year and expects to see the same level of interest this year. Last year, the organization helped 36 percent more new businesses and its workshops all had greater attendance than the previous year, said Sam Bookhart, a counselor and previous chairman of the organization.

"I think that indicates that we were doing more and people were asking for more and looking for more and participating more," he said. "What we're trying to do is help them find ways to help them survive during this tough time."

The organization helps businesses develop or refine business plans, make cash flow projections and find funding sources.

The Lighthouse Christian Supply Co., a family owned business in Conway, has worked with SCORE to improve its operations.

"We're in the same boat as everybody else," said Steve Goodwin, a manager and co-owner of the company. "We're all tightening our belts. We're being wiser with what we're buying."

In the more than 30 years the business has been around, there have been ups and downs but nothing like it has experienced in this economic downturn, Goodwin said.

It hasn't laid off employees but has cut back on advertising and is buying less merchandise, he said.

Financing is a key challenge

Many businesses working with SCORE have had trouble getting financing, Bookhart said. Even established businesses that have long had a line of credit with a bank have had it cut off, he said.

"We've found it extremely difficult to find a local bank to get loans," he said. "Some of them need bridge loans to help them, to tide them over until the business really does come back. But I'm afraid the economy is not going to come back very rapidly ... and that is going to be a tough challenge for a lot of businesses to survive this period waiting for it to come back."

SCORE works with the Small Business Administration to help businesses get loans supported by the federal government.

"The lending right now is very, very tough," said Paul Thomas, the senior area manager for the Small Business Administration.

More federal regulations, which hold banks to a higher standard, are keeping some of the banks from lending as freely as they have in previous years, he said.

"A lot of them have capital issues and they are hanging on to what they've got," Thomas said.

The SBA does not lend money, but works with banks and guarantees part of loans made to small businesses under certain programs.

Through the end of February, the SBA is guaranteeing up to 90 percent of loans that are less than $1.66 million. Congress may extend the program, which was approved last year to help small businesses get the money to operate or expand. If there is no extension, the SBA will return to guaranteeing 75 percent of loans of more than $150,000 and 80 percent of loans of less than $150,000.

"A lot of businesses are hanging on, but they're barely hanging on," Thomas said. "They need capital to improve their business, to expand [or] just to catch up."

New businesses take the leap despite the risk

For some, the economic downturn presented an opportunity to open a new business. Nell's Closet, a women's clothing resale store in Calabash, N.C., opened in November, and despite some ups and downs in the past few months, the owners are optimistic.

"We think that a lot of women like to shop and they like bargains, and when you provide good quality merchandise at an affordable price they're buying," said Marcy Nell Jay, who owns the small shop with her husband.

The couple, the only employees, took their savings and used it to open the business.

"We're very careful about how we spend money," she said.

Jay is optimistic about the year ahead, but she, like many business owners, knows it will take time for the economy to improve.

"I'm looking for it to stay static, flat," said Hyman. "I don't see a lot of changes up or down. If there's nothing major that happens in the world I think we're just going to continue down this path to a slow recovery."