By the Bootstraps

Halloween and dressing up go hand in hand. Through the magic of makeup and costumes, any Chicagoan can become the character of their choosing. But what’s a costume store to do during the remaining 364 days of the year? And how does one stay afloat during a recession that makes costume needs more do-it-yourself than pick-and-buy?

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Jake, a local independent boutique in Chicago’s Gold Coast, has recently caught the attention of the New York Times Style section, but has little reason to celebrate. Owners Lance Lawson and Jim Wetzel have incurred the wrath of the fashion industry after many formerly loyal designers realized the duo had no intention to pay them for their wares, the Times reports.
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In the far North Side of Chicago, Lincoln Square is a homey neighborhood with a bustling commercial street along Lincoln Avenue.  During these warmer months, its sidewalks are packed with young families: parents pushing baby strollers and preschool-aged children skipping along.  Just as any other neighborhood in the city, Lincoln Square has been affected by the recession, but not terribly so, says Mindi McCreless, membership director of the Lincoln Square Chamber of Commerce.

“Companies are down, but they aren’t closing their doors,” McCreless said. “There have maybe been two closings.”

McCreless said there hasn’t been an increase in vacancy applications from members and that people are actually trying to open their own businesses, a local trend some hope will supplement their incomes.

However all Lincoln Square businesses do not have to apply for membership with the Chamber of Commerce, meaning there could be more closed or struggling stores  in the neighborhood. So just how are the stores still hanging in there doing? In the next few days, we’ll have profiles of the various businesses in this neighborhood and how they are faring in this economy.

Photo credit: “Lincoln Square”

Despite its affluence, Chicago’s Lincoln Park neighborhood has seen its fair share of papered-over windows and for rent signs. But how exactly has the recession affected one of Chicago’s ritziest areas? myFox Chicago offers some answers. According to the report, Lincoln Park appears to be faring well, compared to other neighborhoods. Foreclosures are “few and far between” (though people are selling their condos at a loss) and tourists checking out the Steppenwolf, Lincoln Park Zoo and the area’s popular restuarants keeps money coming into the neighborhood. However, Children’s Mercy Hospital’s closure and planned expansion at DePaul may translate into economic devastation if care isn’t taken.

I’ll be on the ground this weekend talking to store owners in the area and see what their thoughts are on the state of small businesses in Lincoln Park. Until then, enjoy myFox Chicago’s slightly odd love letter to the LP, which you can watch in its entirety below:

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Verse Chicago (1821 W. North) opened in the winter of 2009, once owner Kortnee Doss returned to Chicago after living with her fiance in Spain. Doss was saddened to find that in her absence, a huge, thriving fashion industry hadn’t developed.

“I feel like a lot of our young and raw talent, they leave as a result of that,” she said. “They don’t incubate (in Chicago). They don’t raise (people) to plant their roots here. They go to New York, they go to L.A. or they leave the country.”
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Even though small business creation is declining nationwide, there are a few brave souls out there creating new businesses. According to an article written Monday in the Chicago Tribune, thousands of professionals are becoming their own boss after losing their jobs:

The Kauffman Foundation is calling “The Coming Entrepreneurship Boom.” Triggered by the recession, an aging population and less job security, a perfect storm of entrepreneurship conditions is emerging, according to a new report from the Kansas City, Mo.-based non-profit.

By building their own businesses, many hope to earn an incomes that will supplement lower wages or replace a lost job. Leading this movement of “accidential entreprenuiarlism” are people between 55 and up, according to the article. People between the ages of 55 and 64 “start businesses more often,” the Tribune article said.Once able to rely on accrued retirement funds to relax during their golden years, the rate of self-employment in this age group has jumped from 15.6 to 17.3 percent, according to the New York Times “You’re the Boss” blog.

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As I mentioned in a previous post, independent businesses are seen as potential driving forces out of hard economic times. The flow of events looks a little something like this:

Potential Business Owner gets Loan > Business Owner opens Small Business > Hires People > People Buy Goods From Small Business > $$$$ to Owner, Employees and the WORLD!

Sadly it isn’t that simple, especially in light of an alarming new trend highligted in a recent USA Today article: there is a decline, instead of an increase, in small business creation during the recession and a rise in bankruptcy. This switch is even greater than could have been expected from pre-recession numbers, according to the New York Times’ blog “You’re the Boss.”According to their analysis, if business bankruptcies had followed the rate of bankruptcy from the first quarter of 2006, around 10,000 businesses would have filed for bankruptcy by the first quarter of 2009. Yet with the recession, more than 14,000 businesses have gone bankrupt.

Considering that small businesses make up half of the nation’s gross domestic product and “account for most job growth” according to USA Today, it’s incredibly important for business owners to receive loans to help them out of debt and continue their businesses. However even with $730 million being diverted to small business issues, 16 percent of small business owners say business loans are harder to get.

According to PolitiFact’s Obameter (a fun way to keep track of our president’s campaign promises), President Obama has kept his promise to expand loan programs for small businesses. But it remains to be seen if and when this move will actually restore bank and small business owners’ confidence.

Photo credit: “Recession in Chicago” By the Red Line Berwyn Stop. http://www.flickr.com/photos/theeerin/ / CC BY-NC-ND 2.0

The current economic recession and how independent businesses are affected is the beat this blog will cover over the next 10 weeks. Three subjects I hope to follow during that time:

1. The Stimulus Package and Small Business Loans: According to a CNNMoney.com article, the number of small business loans being offered in today’s economic climate has dropped sharply. This has left owners with few options for starting or expanding their businesses. The Obama administration’s stimulus package includes funds that help small business cover their expenses and reinvigorate the bank’s interest in giving small business loans. The hope is that once the money is distributed, small businesses will have a part in reinvigorating the American economy. But how will it affect business owners’ communities in Chicago if they do or don’t receive the funds?
2. Gentrification: A common complaint I’ve heard in the gentrification debate is that new businesses moving in either push out old businesses or bring in a new group of people who once avoided the neighborhood (i.e. art galleries in the predominantly-Hispanic neighborhood Pilsen bringing in white people who decide they want to live in the neighborhood). I would be interested in covering how new independent store owners work with or stand apart from the neighborhoods they are in. Could independent businesses be seen as just one of the steps to gentrification before a Starbucks moves in? Can current business owners afford to pay the rent if their neighborhood is being gentrified?
3. Race and Ethnicity: Going hand-in-hand with gentrification is race. In ethnically diverse yet segregated neighborhoods like Albany Park, could non-minority independent businesses change the community for the better or for the worse? Is one neighborhood in Chicago seeing more success in their independent business population versus another?
4. The recession: With high unemployment and potential customers presumedly being more cautious of their spending habits, how are independent businesses managing to stay afloat? What marketing strategies (i.e. reduced prices, coupons) are being used to keep old customers and draw in new ones?
5. Wealth of Chicago’s neighborhoods/Support Local Businesses: One of the things I love most about Chicago is that every neighborhood has a totally different feel and culture all its own. The blog – besides tackling some big issues like those listed above – will show there is more to the city than the North Side or downtown. There are stores all over the city that you may never have heard about if you hadn’t checked out this blog.