Savannah’s small businesses are growing like it’s 2006 with a handful of trends offering hope for continued near-term growth.
During Thursday’s inaugural State of Small Business forum, eleven speakers shared overwhelmingly positive outlooks on several aspects of the local small business economy.
The event, created to put a focus on the positive impact of small businesses in the Savannah metro area, attracted 105 attendees to the Savannah Mall community room where the audience consisted largely of local — and cautious — small business owners.
“There are plenty of reasons to be optimistic,” said Rhett Mouchet, a commercial real estate agent who shared insights on the office, retail and industrial markets at the event. “We just have to hang on a little bit longer.”
The trends outlined Thursday offered small business leaders reasons for hope.
• Business activity in the city of Savannah has experienced a turnaround since 2011, seeing 26 more businesses open than close each month.
• Unincorporated Chatham County saw 158 new businesses created in the first quarter of 2013 while only two closed.
• Garden City experienced 35 percent growth in small business activity in 2012.
• The Small Business Assistance Corp. processed 52 loans worth $322,000 per deal in 2012, nearing 2008 levels.
• Local small businesses that sought assistance at the Small Business Resource Center last year claimed a 13.4 percent increase in employees and a 9.2 percent revenue increase.
• Commercial real estate vacancy rates are down so significantly – from 30 percent to less than 10 percent in the office market, for example — Mouchet voiced a need for renewed building.
• Wells Fargo saw a 320 percent increase in new credit lines from Savannah small businesses last year, and only 25 percent of the bank’s local small business clients are worried about credit access.
“The small business sector is clearly experiencing a rebound,” said Michael Toma, an economist with Armstrong Atlantic State University.
The two-hour forum had the feel of a pep rally, with the speakers sprinkling words of encouragement in with their data sets.
State Sen. Buddy Carter, himself the owner of three independent pharmacies, opened the event by telling the audience “there is no job that is below us and no job that is above us; that’s what the American dream is all about.”
Added Sean Mabey, Wells Fargo’s regional director of small business strategy: “All of you in this room are the backbone of this country. You are people who will help the economy get back to where it needs to be.”
The forum culminated with the release of the results of the first small business confidence index. The survey of 39 small business leaders reflected the cautious mood, with participants responding unfavorably to five of the eight questions.
The turnout for the forum encouraged organizers Marjorie Young, the leader of small business mentoring and counseling organization SCORE, and Joe Marchese, who heads the Savannah Area Chamber of Commerce’s Small Business Council.
“This tells me this has been really, really needed,” Young said.
STATE OF SMALL BUSINESS FORUM
Highlights from the speakers at the first State of Small Business forum held Thursday at the Savannah Mall community room.
Michael Toma, economist at Armstrong Atlantic State University
* Within Chatham, Bryan and Effingham counties, 65 percent of businesses employ 20 or few workers, accounting for 18 percent of employees
* Within the city of Savannah, the formation of new businesses fell by 33 percent between 2006 and 2010; however, the city saw a monthly average of 26 more businesses open than close in 2011 and 2012.
Tony O’Reilly, president of the Small Business Assistance Corp.
* Lending activity in 2008: 60 loans; $348,000 average; 14 participating banks
* Lending activity in 2012: 52 loans; $322,000 average; 13 participating banks
* Projected lending activity for 2013: 21 loans; $732,143 average
Barbara Baucum, occupational tax division manager for Chatham County
* Business trends 2011: 2,035 total businesses; 24 percent drop in revenue from previous year
* Business trends 2012: 2,410 total businesses; 13 percent rise in revenue from previous year
* Business trends 2013 (to date): 2,566 businesses; 5 percent rise in revenue from previous year
Paul Schneider, regional coordinator for Georgia Department of Labor
* Chatham Co. labor force 2008: 133,657 total, 7,604 unemployed
* Chatham Co. labor force 2009: 130,310 total, 11,055 unemployed
* Chatham Co. labor force 2010: 132,515 total, 12,153 unemployed
* Chatham Co. labor force 2011: 135,385 total, 12,509 unemployed
* Chatham Co. labor force 2012: 137,965 total, 11,803 unemployed
Sean Mabey, regional director of of small business strategy for Wells Fargo
* Small business credit card lending in Savannah area up 69 percent in 2012 over 2011
* Small business loans and lines of credit in Savannah area up 320 percent in 2012 over 2011; volume for 2013 already above 2012 levels
Kyle Hensel, director of UGA Small Business Development Center in Savannah
* Clients increased employees by 13.4 percent
* Clients increased sales by 9.2 percent
Rhett Mouchet, commercial real estate agent with Mouchet & Mitchell Group
* Office vacancy rate down from 30 percent in 2008 to less than 10 percent as of March 31, 2013
* Retail vacancy rate down from “high-teens” in 2008 to 6 percent as of March 31, 2013
* Industrial vacancy rate down from 30 percent in 2008 to 15 percent as of March 31, 2013
SAVANNAH SMALL BUSINESS CONFIDENCE INDEX
A number of Savannah small business leaders were sent an eight-question survey aimed at gauging business confidence. The survey, which asked participants to rank their answers on a scale of 1 to 5, with 1 meaning “definitely not” and 5 meaning “definitely yes” and 3 meaning “maybe”, received 39 responses.
Question|Average score
I plan to increase employment|3.0
I plan to make capital outlays|2.97
I plan to increase inventories|3.25
I expect the economy to improve|2.47
I expect real estate prices to increase|2.22
I expect job opportunities to improve|2.50
I expect credit conditions to improve|2.70
I think this is a good time to expand|3.13