Lehman Brothers collapsed, Circuit City is in the process of liquidating and pretty much everyone knows somebody who’s been laid off. Even the ubiquitous Duane Reade is rumored to be near bankruptcy. But not all businesses are on the brink of failure. In fact, some small local entrepreneurs have not only been surviving in these harsh economic times, but thriving.
Nancy Ploeger, president of the Manhattan Chamber of Commerce, is one expert who sees firsthand the current challenges, as well as the opportunities, for local businesses.
“You have to look for the opportunities and you have to be positive,” Ploeger said. “And if you just stop listening to the media and stop thinking doom-and-gloom, you’ll have enough creative time to think about other ways that you can go out after customers.”
The credit collapse last September led short-term borrowers, including many small business owners, into some long-term problems. But many have managed to avoid it, Ploeger explained, especially those who don’t depend on credit to run their establishments.
“If you’re a good businessman and you always were able to keep a strong balance in your bank and not rely on month-to-month credit, those are the businesses that are going to be able to hold on longer,” she said.
Simply being in New York City, an international destination for tourists and transplants, is another factor working in favor of local businesses, explained Seth Bornstein, assistant dean for economic development at LaGuardia Community College. The tourism industry alone brought $30 billion in spending to the city in 2008, a record high.
“Traditionally, I think New York feels the effects of a national slump a little less than the rest of the country,” Bornstein said. “New York is always going to be a destination for a lot of people from this country and all over the world. That will never stop. People want to be here. No matter how rough things get in the next year or so, I think we will always be a destination for new energy and brains, and that’s going to help our economy.”
Whether it’s due to a limited reliance on credit, a creative service or product, or simply the ability to capitalize on being in New York City, the three businesses profiled here are unquestionably on the upswing. They’re growing in Manhattan, throughout the five boroughs and, in one case, across the globe.
KIDVILLE GOES GLOBAL
While others were still making New Year’s resolutions, one business was expanding all over the city, country and even internationally. Kidville, a one-stop-shop offering a range of services and early development classes for newborns through 5-year-olds, acts as a hub for city families. The business, currently in its fifth year, began as a single location on the Upper East Side and now has five outposts all over Manhattan. While a new annex in East Chelsea just opened, the big news at Kidville is its recent acquisition of international chain JW Tumbles, a kids’ gym with locations in the United States, Hong Kong and Singapore.
“One of the reasons we acquired Tumbles is because we are going to be able to add Kidville content to the facilities that are already all around the U.S., and internationally,” said Andy Stenzler, co-founder of Kidville with his wife, Shari Misher-Stenzler. “It was a great transaction for us.”
The business also underwent some major changes late last year, when it merged with Longfoot Communications and became Kidville, Inc., a public company. The merger allowed the local operation to open up franchising options—a location in Dallas, Texas, is in the works—and eventually led to the Tumbles acquisition.
But Stenzler believes part of the reason the Kidville brand is doing so well in tough times is because it is a family-oriented business.
“We’re in a sector, the children’s sector, where people would give up many more things before giving up something for their children,” Stenzler said. “Certainly the economic climate has changed, but we provide phenomenal services and classes that you can go to every week. And maybe people won’t go on as expensive of a vacation, but they want to come every week with their child because it’s so meaningful for both the parents and the children.”
Kidville’s success can also certainly be attributed to the growth of city families in the past several years, and the idea of creating an inviting community for kids and parents—something that didn’t exist when the founders had their first child, Kylie, who is now 6. Stenzler explained that the inspiration for Kidville came after his wife returned from taking the 6-month-old to her first music class. After waiting in line and dragging the stroller down the stairs, Misher-Stenzler and Kylie attended the music class in a rundown converted dance studio.
“There weren’t great quality places in New York and you had to trek around to all these different sort of mom-and-pop places,” Stenzler said. “We thought, why shouldn’t there be a great, quality place that has everything under one roof?”
Stenzler, who co-founded the sandwich chain Cosi, and Misher-Stenzler, co-founder of London Misher Public Relations, put their business sense and marketing savvy to work and created the kind of place they wanted to attend. In addition to classes, the larger Kidville hubs feature a café, indoor playground, kids’ boutique and kid-friendly salon for haircuts. The couple also hired talented and knowledgeable people already in the industry to create the development classes and programming that are now the staples of the business.
Classes range from art and cooking to gym and dance. One of the more popular courses is the pre-nursery program Run, Wiggle, Paint and Giggle, a smorgasbord of activities including art, ball play and a wiggling send-off with the house band. Another successful program is Kidville University, a preschool alternative, which slowly socializes toddlers into a preschool schedule and helps both kids and parents manage separation anxiety.
The class that has really caught the attention of families, however, is Little Maestros.
“Most music classes are just one person playing the guitar and Maestros is a full band with a lead singer, and a drummer and a keyboardist,” Stenzler said. “It’s a fabulous program with all original music.”
Little Maestros was founded by musician and city mom Marni Konner. Stenzler and Misher-Stenzler were customers of the class and knew it would be a perfect addition; now Kidville is the exclusive provider. The original Little Maestros band has even released three hit albums, been on tour and is currently in talks to have a television show.
Although Kidville classes fall into the premium price range, clients feel like they are getting good value for the expense. Enrolling in a class comes with an automatic “Silver Membership” to the facility, which includes perks like discounts at the café, salon and boutique, as well as passes to the indoor playground.
Upper East Side mom Lisa Schneider is one client who says she will continue bringing her 2-year-old twins, Ava and Gabrielle, to Kidville.
“Everyone is so nice and friendly and warm,” Schneider said. “It’s just run very well and that’s really why we keep coming back. They are very good at who they hire and the types of classes they offer. They seem to have their finger on the pulse of what kids enjoy.”
Schneider sad the convenience of having so many services under one roof, as well as friendly staff who know her and her children by name, make the price well worth it—even in tough economic times. And that’s exactly what Andy Stenzler and Shari Misher-Stenzler hoped customers would feel.
“It’s an exciting thing for a company that started in New York City just over four years ago to be at a point where we are already an international company with international distribution,” Stenzler said. “It’s been a tremendous experience. We love the New York market, we love the idea that we’ve built something here in New York City, and we love the idea that we’re taking that to the rest of the world.”
AN EMERGING GREEN ECONOMY
The global economy may be in the gutter, but a green economy is sprouting from the fallout. And Green Spaces, based in Fort Greene, Brooklyn, is one eco-business poised to lead the pack.
The company, founded by Jennie Nevin in May 2008, provides low-cost workspace for green start-ups to launch their businesses and connect with other eco-entrepreneurs. Renting space comes with perks like use of a conference room, wireless Internet, reserved spots at business seminars and workshops and even interns for project research.
“It’s really helpful as a start-up company to be able to talk with other start-ups and share ideas and figure out the best way to move forward in your business,” Nevin said.
Green Spaces, which is only two stops into Brooklyn on the No. 4 or No. 5 trains, is reachable from the East Side of Manhattan, so Nevin is planning a second location, scheduled to open in May or June, in the Hell’s Kitchen or Upper West Side areas. The company also recently announced the launch of the city’s first competition for green businesses, which seeks to highlight a start-up company with innovative ideas.
Taylor Mork, owner of Crop to Cup—a company that connects sustainable coffee growers in Uganda with roasters and retailers in New York City—is one Green Spaces client. He believes that even in this economy, green products and businesses have an edge over conventional ones, and spending habits will remain green once the economy starts to turn around.
Until four or five months ago, Mork did much of his work from his home in Harlem. Now he uses Green Spaces to grind and package coffee, and complete more typical office tasks.
“For a small business in New York City, you can’t afford your own office space, hands down,” he said. “This is necessary for any small business that wants to have a meeting place for staff or production facilities.”
In some ways, Nevin feels that the recent economy has helped her business grow and expand. Because it is expensive for start-up businesses to move into their own furnished and equipped space, entrepreneurs are looking for other options.
The new Obama administration, she added, is expected to direct an influx of funds toward infrastructure and green spending, encouraging even more new investors to start up businesses.
“People are seeing there’s an available market for these types of products and services,” Nevin said. “And we were seeing a lot of people from Wall Street that were looking at [the recession] as an opportunity to make a career change.”
CUPCAKES: THE “AFFORDABLE LUXURY”
Owner and founder Jason Bauer, with wife Mia Bauer, believes that Crumbs’ success has to do with the ability to generate and reinvest revenue in new stores, as well as the “affordable luxury” of the cupcake.
“People might not spend as much going out to dinner, but they’ll still treat themselves to a cupcake,” Bauer said. “It’s still something that they can enjoy, make them feel good, have fun with, but not cost them a fortune.”
The first shop only had three or four different cupcake flavors each day, along with other baked goods like brownies, cookies, pies and Danishes. But after a few months in business, the Bauers decided to focus mostly on the cupcake. Now display cases in some stores offer up to 45 varieties, from classic options like a homemade Hostess cupcake to the newly created mint chocolate chip grasshopper cupcake.
“Mia is constantly coming up with new combinations,” Bauer said. “Sometimes we have contests in our stores where we ask customers to come up with new products, sometimes we have our employees make suggestions and sometimes there are different things that we see throughout the world and use it as an influence.”
That creativity is trickling down into other ventures for the family. Last fall, Mia Bauer wrote a children’s book, Lolly LaCrumb’s Cupcake Adventure (DK Publishing, $16.99.), which came with a baking kit and recipes.
Storybooks aside, Crumbs’ success seems to be based on some very basic business tenets that stand true in any economy.
“It was always a neighborhood, old-fashioned bakery with a more modernized product line,” Bauer said. “We pride ourselves on knowing our customers by name and how they like their coffee and what cupcake they like. Lots of regulars—that will never change.”
SIDEBAR: MOM AND POP ON LIFE SUPPORT
Trackback from your site.