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Small Businesses Struggle to Recover

September 4, 2003

NEW YORK (AP) _ A block from the site of the World Trade Center, Evelyn Robb still worries. Sales at her chocolate shop were devastated by the Sept. 11, 2001 terror attacks, and they remain down as Lower Manhattan struggles to recover.

``It still hasn’t really improved,″ Robb said. ``I wonder what’s going to be in the future.″

A continent away, in Rancho Cordova, Calif., Tom Lusi’s data storage business has changed, probably forever. After 9/11, he lost millions of dollars in government contracts as money was reallocated to homeland security; he had to switch to digital video storage or see his company fold. He has new government work and sales have rebounded, but his payroll is half what it was before the attacks.

``What we’ve done is, you lick your wounds and get on with it,″ said Lusi, chairman of Removable Media Solutions Inc.

Whether they were located near the World Trade Center or Pentagon or hundreds or thousands of miles away, small businesses have had to cope with drastic changes caused by the attacks. Two years later, many still struggle, while others have found ways to rebuild. Some have recovered with the help of government loans.

Robb, who owns a shop called Evelyn’s Chocolates, suffers because she lost customers from the Trade Center and surrounding buildings whose corporate tenants fled after the attacks. And tourists no longer visit as in the past.

``It was a very difficult time to go through and it still is,″ said Robb. A Small Business Administration loan helped but hasn’t assured her future. ``I’ve been here for 40 years and I really want to stay,″ she said.

A few miles north, in midtown, sales at Arnold Greenberg’s travel book shop have rebounded but, like Lusi, he has had to remake his business. As Americans canceled vacations in the months following 9/11, Greenberg was forced to give up selling recently-published books and guides and focus on antiquarian volumes instead.

``I can’t say it was a good thing. It really broke my wife’s heart. ... But we had no choice,″ said Greenberg, owner of The Complete Traveller Bookstore. He said some customers were angry, but without the change, he would have ended up in bankruptcy court.

Greenberg’s store is faring better now because ``the antiquarian book business didn’t drop to the same extent as the new book business. ... But I don’t think it’s ever going to go to the point where we would start to carry new books again.″

The business owners, even if they’ve weathered the two years relatively well, sound weary, even chastened.

Gerry Elwood, owner of The Maids, a home cleaning franchise based in Red Bank, N.J., said her business is ``more than back on track,″ but she had to double her territory to accomplish that.

Elwood’s business took a series of blows, starting with the grim fact that several customers died in the trade center attack. Other customers canceled cleaning appointments out of depression _ ``everybody knew somebody″ that was killed, she said _ or becaused they feared having outsiders come into their homes. People who lost their jobs or whose small businesses were hurting stopped her service, because, as Elwood acknowledges, it’s a luxury.

Then the anthrax scare complicated advertising: People were afraid to open her firm’s solicitation letters.

``It was pretty ugly for several months,″ Elwood recalled. She had to rebuild because ``I’m not doing this to be a hobby _ this is my life.″

Some companies persevered because they had a solid cadre of loyal customers. J&R Computer and Music World, a retailer near the trade center, was shut for six weeks and lost its inventory while it was used as a post-9/11 command center, co-CEO Rachelle Friedman said.

``We had to figure out a way not to lose our customer base during that period of time,″ Friedman said.

So J&R offered free shipping to customers in the metropolitan area if they ordered via its Web site and toll-free number. Friedman said it was able to make up for the loss of walk-in customers.

``We’ve been open 32 years and have a very loyal customer base. They’ve been cheering us on and sending us encouraging e-mails,″ she said.

Some of the companies faring better said they would have failed without loans. The SBA, which originally made economic injury disaster loans available to the areas around the trade center and the Pentagon, offered loans across the cuntry because so many businesses were affected by the attacks.

``I would have closed the business,″ said Lusi, the Removable Media Solutions chairman.

Dent-Ology Inc., an auto reconditioning company in Fontana, Calif., would have had to let some of its top workers go without the loan, co-owner Jim Perod said. The company, which mostly services the auto rental industry, had about 70 workers before 9/11 and dropped to a staff of 38.

Now the company is doing well, but its payroll is still at about 50. Perod says that’s actually a good thing _ the firm is more profitable than it was before.

The loans, however, are not a panacea. Among the concerns of Robb, the chocolate shop owner, is the money itself.

``It’s still something to pay back,″ she said.

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