By the Bootstraps

Marguerite Garden’s owner Marguerite Gluck said she was heartened by her customers purchasing as much as they could afford to keep her in business. It got me wondering: Do you continue shopping at your favorite local stores to give them business during the recession?

Photo credit: “cash register”

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”

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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Linens ‘n’ Things.

Eddie Bauer.

Starbucks.

Steve and Barry.

These stores and numerous others are either closing low-performing locations in the city or cutting their losses and filing for bankruptcy. Stores that once revelled in the big boom of America’s economic heyday are now feeling the push of a financial crisis many have likened to the Great Depression of the 1930s.

A day after the new year, Chicago Tribune reporter Sandra M. Jones rang in the New Year with disheartening news: 2009 would be “the year of reckoning for retailers.”

A mere 5 percent of companies in the Standard & Poor’s 500 went bankrupt between 1978 and 2005, compared with 27 percent of retail companies, according to Bernstein Research.

[Colin] McGranahan (an analyst at Bernstein Research in New York) predicts that this recession will wipe out 5 percent to 10 percent, and maybe more, of the stores now operating, and he foresees the reckoning to continue through 2009 and estimates the challenges could spill over into 2010.

So why focus on Chicago’s smaller businesses, when presumeably more people stand to lose from hardships felt at bigger companies?

Chicago’s a city made up of neighborhoods whose boundaries are felt by natives and visitors alike. Within those neighborhoods are micrcosms of Chicago-at-large; each has its own feel, its own culture, its own voice. The small businesses within those communities make up just as much a part of the community as the people who live there. By exploring how these independent stores are being affected by the recession, we’re really seeing how each community in Chicago is being affected, by neighborhood to race to class.

Also small businesses and entrepreneurial spirit are considered guideposts to help us get out of this recession. But what happens when commercial bankruptcy skyrockets as a recent report in USAToday reports? If banks are less willing to give out start-up loans and people are even less willing to strike out in unknown territory during a time when security is key, what happens to that part of the American dream?

We’ll find out together and hopefully make some sense of these unsecure times through the stories of independent businesses on the “Main Street” of different Chicago neighborhoods.