Business mending maintains client spending

Revised strategies help enterpreneurial women stay strong as retail sales tumble
By Evelyn Lee

Nicky Mesiah, president of Mesiah Event Planners Inc., lost about 30 percent of her business when a store that carried her toffee went out of business. To cope with the loss, Mesiah re-evaluated her prices, presentation and location. [Steven J. Dundas]
As even the affluent pull back on spending, women who own businesses that offer discretionary products and services are doubling up efforts to stay viable in the recession. To cope with the downturn, such entrepreneurs are introducing more budget-friendly options, expanding their services and building better business relationships.

“Weakness in affluent consumer confidence … is causing even the richest Americans to hold off on discretionary purchases,” said Pam Danziger, president of Unity Marketing, a Stevens, Pa.-based market research firm. Affluent U.S. consumers spent 6.4 percent less on discretionary products and services in the fourth quarter of 2008 as compared to the third quarter, according to a recent study by the firm.

“I realize everybody’s making choices,” said Bernadette Armiento, a nutrition counselor and owner of Shining Life Nutrition in West Orange. “People’s disposable income is down, and people are watching how they spend their money.”

Since starting Shining Life three years ago, Armiento, 48, said she has seen business increase every year, but “there’s been a bit of a slow start this year.” Inquiries for her services — which include one-on-one health counseling, classes, corporate presentations and menu consulting — have slowed by 20 percent since the same time a year ago, she said.

To accommodate her clients’ tighter budgets, Armiento now offers shorter, one-on-one health counseling programs, and is looking into developing online classes and programs that are more affordable and flexible, she said. Also, while requests for some of her one-on-one services have declined, Armiento said she is getting more inquiries for group cooking lessons and lunchtime talks at corporations.

Nicky Mesiah, president of Mesiah Event Planners Inc. in Montclair, also has realigned her business to better adapt to leaner times. About a year ago, she shifted her focus from event planning to dessert-making, as she anticipated people holding fewer events in a worsening economy, said Mesiah.

But even as demand for her signature product, Miss Nicky’s Gourmet Toffee, has remained solid, Mesiah has had to make other changes. In August, she began selling the toffee in $10 and $20 bags — a cheaper alternative to larger boxes, which retailed for $22 each.

“I took into consideration that cost is an issue,” she said. She also has stepped up advertising to highlight the lower price point for her toffee, and has cut packaging costs by changing suppliers. In addition, “I will probably expand my product line a little bit more to take me through” the recession, she said.

Mesiah — whose toffee is sold at three stores in Montclair and one in Buffalo, N.Y. — said her biggest concern has been whether the small stores that carry her product will be able to make it through the recession. “Those stores aren’t getting the traffic,” she said. In October, one Montclair store that had sold Mesiah’s product closed — it had accounted for about 30 percent of her toffee sales. “Some of that business is lost, never to be seen again,” she said.

Sales are flat this year compared to last year, largely because of the one store closing, said Mesiah, who is now in talks to get her toffee into larger locations. “If it’s not in major stores, then my sales are affected,” she said.

Equilibrium Montclair, a health and fitness center in Montclair, also has lost customers because of the recession. “Some people started losing their jobs,” said Deborah Vaphides, its co-owner. For the first time in its three-year history, the business had a sale during the last holiday season, offering 10 percent off prices for services such as Pilates sessions and acupuncture therapy.

Vaphides, 51, has concerns about surviving the recession, but “you can’t think that way if you have a business,” she said. “You have to have new ways to interest people.” She plans to offer new services, including massage therapy, physical therapy and health seminars, to attract business.

What’s also helped entrepreneurs is the way they have positioned their services. “I don’t think people who are calling us are seeing this as discretionary,” Vaphides said. “Of course we have lost some people — but those who have stayed, they’re seeing this as necessary.”

In a down economy, both Vaphides and Armiento are marketing their businesses primarily through networking. Armiento has become more actively involved with networking groups such as the New Jersey Association of Women Business Owners and LeTip. Meanwhile, Equilibrium has been developing relationships with physicians, who can send patients to the facility. “We do a lot of face-to-face marketing,” Vaphides said. “People need to see who you are, rather than seeing your logo in the paper.”

Relationships can make a big difference for business owners during a downturn, said Soraya Morgan, founder of Morgan Business Solutions, a business advising firm in Upper Montclair. “You will pay for what you find value in,” she said. “People typically find value in services where you have a relationship.”

Morgan said entrepreneurs should focus on meeting potential clients and business contacts, while spending time with their best customers.

Relationships can help keep customers coming in even during tough times, she said. “If you’ve been going to that discretionary service for a number of years, or if you’ve made a connection with the owner or one of the managers and they hit upon what’s important to you, you’ll keep going, regardless of where your finances are.”