There was a time small businesses dotted every Main Street in America. Downtowns were vibrant, community-gathering places.
As time went on, chain stores and the development of big box retail quickly began to overshadow the smaller entities that once tied a community together. It quickly became an age-old battle of David versus Goliath.
In recent years, those once-vacant storefronts have been reinvented, breathing new life into otherwise stagnant downtowns. According to the U.S. Small Business Administration’s 2017 Wisconsin Small Business profile, more than half of the private workforce in Wisconsin is employed by small businesses — approximately 1.2 million people. The administration also reported 30,000 net jobs in the state can be attributed to small businesses.
“In Wisconsin we are strong on our Main Street businesses,” said Shirah Apple, public affairs specialist at the Wisconsin District Office of the U.S. Small Business Administration. “Wisconsin has one of the higher business survivability rates in the country.”
Unlike large corporations, when a small business finds itself headed in the wrong direction, it can turn itself around faster and adapt much more quickly to change, she said.
Adapting to the times
Steffes True Value Hardware in Wisconsin Dells is a prime example of that thinking. Where once the business attracted locals for everything from swim suits to camping gear, behemoths such as Wal-Mart and Home Depot started acquiring the small hardware store’s customer base. It weathered the big box storm by reinventing itself.
“We shifted our business focus,” said Gary Booth, who has managed the store for more than 20 years. “When I first came to work here there was a tourist season and then the winter. Now it’s year-round tourists with the big hotels and water parks. So we became focused on selling our products to those businesses instead.”
The hardware store began specializing in the things these big businesses needed — with the quick turnaround time a small business could provide.
“We sell a lot of maintenance supplies and lighting,” Booth said. “We have a lot of hard to find stuff in stock; everything from small appliance bulbs to big parking lot lights. We’ve tailored our inventory to fit what the community needs.”
That also includes window and screen repair work.
“As a hardware store it’s a service we’ve always offered, but as the years have progressed, other people in the area quit doing it,” Booth said. “Now we have one guy and that’s his main focus. So we’ve been able to capitalize on that.”
Luckily for Cindy Eberhardt, there’s a need for quality work boots in the Mauston area.
Eberhardt has owned Ray’s Shoes since 2013, the business was owned by Eberhardt’s brother-in-law for nearly 50 years prior. Despite the push of big box retailers, internet sales and chain stores like Famous Footwear, Ray’s has survived.
“It is very hard to keep local people local, especially because of the Dells where there’s an outlet mall,” Eberhardt said. “We are halfway between La Crosse and Madison. There are Kohl’s and Farm and Fleet. So we have to deal with that.”
Eberhardt believes the store’s success comes from specializing in work boots.
“The quality of shoes is not the same in some of those other stores,” Eberhardt said. “When people look, though, they are comparing price. They might think the quality is the same, but it’s not.”
Ray’s also carries higher-end shoe brands that offer a better quality product, she said.
Finding a niche in a community is another way small businesses are able to turn a profit. Discovering a target customer base is paramount to success. Prairie du Sac business owner Dana Fehrenbach, who is an avid knitter, noticed people really took to her homemade creations.
“I had people coming over my house during the evenings to knit,” Fehrenbach said. “They wanted to learn so I would teach them.”
When the local consignment shop — which sold yarn — went out of business, Fehrenbach saw an opportunity. She rented out a small space in an established business and watched it take off like a rocket. When an 800-square-foot storefront on Water Street presented itself, Fehrenbach seized her chance. Now DMarie Knit and Fiber has thrived since it opened in 2015.
“I’ve probably taught 300 people how to knit in the two years since I’ve been open,” Fehrenbach said. “Or I’ve gotten people back into knitting who used to do it but now can’t remember. It’s been crazy.”
Fehrenbach realized early on there was a whole new generation of people who wanted to learn how to make something from scratch. So she combined the retail aspect of the business and with the fact people would pay to learn the skill she possessed.
“I think a lot of it is just about the camaraderie,” Fehrenbach said. “It’s a great social activity. People love to touch fiber and the variety of colors also stimulates the senses.”
A way to compete
The same kind of passion Fehrenbach has for knitting is what drives John Kessenich in his desire to bring healthy food to the community of Baraboo. The Grainery, which Kessenich has owned with his wife, Sandy for the past 11 years, started off as a supplement store in the 1970s. When the Kessenich’s purchased the store more than a decade ago, they decided to expand the business to include good, nutritious food.
“We get a lot of people who come in to buy ingredients to make their own food, like thick rolled oats, raw nuts and seeds and spices — and we offer that all in bulk,” John Kessenich said. “We saw early on that a lot of people in this area like to make their own versus heavily processed. We do offer some grab and go snacks, but part of our overall mission statement is to raise healthy families.”
With all the options available for buying food — grocery stores, big box retailers, farm cooperatives and the internet – Kessenich is very aware he not only has to offer the same products, but better quality products at reasonable price points if he wants to maintain his customer base.
“We have to be on top of our game knowing people can get online and then buy very competitively,” John Kessenich said. “That’s huge. We can’t just sell people products. We have to provide them with an experience that they can’t get down the street and make it worth their while to come in.”
Kessenich said part of that is making sure his customer service is spot-on.
“A lot of people don’t know much about healthy eating and what certain products do and how to use them,” Kessenich said. “It can be overwhelming coming into a store like this. Part of our job is making sure they feel comfortable and welcome. In a big box store you are just another number and often times employees don’t know where to find anything let alone what their products do.”
Specializing in a service big box retailers don’t provide is another reason Ray’s has been successful, Eberhardt said. “We are a sit and fit store. In other stores you go in and find your own shoes and end up sitting amidst a big pile of boxes,” Eberhardt said. “But here we measure you and make sure you have the right size. We bring you out your shoes. Customer service is a huge part of it.”
Kessenich said in addition to customer service and having a quality product it is equally important to know the competition and the target market.
Getting a pulse on a community’s needs is a critical step in starting a business. However, equally as important is being able to adapt to change.
Lorraine’s Mini Mall in Reedsburg started out decades ago with a jewelry store and gift shop. The daughter of the store’s namesake, Peggy Albert, along with her husband, Blaine, purchased the waning business and have been trying to breathe new life into it ever since. It now houses a boutique, Radio Shack, US Cellular and Hallmark store.
“It’s a struggle and it’s not gotten much better,” Albert said. “It’s getting worse to some extent. Unless people stop shopping online or at big box stores … Obviously we can’t carry everything but we certainly try. Sometimes we just can’t keep up.”
Albert said the jewelry business closed due to lack of community support.
“I have some people who come in and expect you to carry everything they have in mind, so we try to keep up with the demand,” she said. “If we could we would fill the block so people wouldn’t have to step a foot out of town.”
The situation has left business owners with a challenge on how to proceed. For Albert, it means going back to her roots.
“I want to continue with what my mother always tried to do, which is to take the customer’s needs to heart — good old customer service,” Albert said. “Let me show you what I have and share my ideas. Because we do have a lot of good ideas here if you can think past the exact thing you were looking for. Maybe it will even be better.”
Albert said although the greeting card industry floundered a bit with the ease of social media, people have begun to remember how special it is to get a piece of mail.
“Cards are definitely having a comeback,” Albert said. “People think it’s more special to get a card in the mail because it means more. It means you are truly acknowledging them.”
Sometimes, like in the case of Lorraine’s Mini Mall, retailers and small businesses have to ride the tide of change. That’s when offering that all around experience for the customer is going to yield loyalty. And loyal customers will tell their friends about. That word-of-mouth marketing is essential to small businesses that might not have the budget or marketing prowess to cast a wide enough net on potential customers.
Staying in the public eye
“One of the bigger challenges is just letting people know you are put there because small businesses don’t have the marketing budget of a bigger store,” said Marianne Hanson of the Portage Chamber of Commerce. “It’s difficult. And you have to be able to keep your products in the forefront of the consumer.”
Apple said even if you do everything right it all comes down to how well the business is managed. “Businesses that plan well and utilize resources like small business development centers tend to do better when having those relationships. It’s good to get outside help and perspective every once in a while.”
The Small Business Administration’s Apple said resources can be very valuable to small businesses. The challenge is getting the word out.
“It’s quite an issue and I think certainly there needs to be greater awareness,” Apple said. “One of our challenges is making folks aware of our resources.”
Fehrenbach said awareness was where she initially struggled.
Finding the money
“Opening a new business takes a lot of money and you don’t get much help from the banks,” she said. “I can’t tell you how many banks I went to and none of them told me about any other resources I could try. I kept hearing ‘Knit shops don’t last’ and I kept saying, ‘Well, you haven’t seen me in a knit shop.’”
Finally, after two years and amassing a huge inventory, Fehrenbach said she was able to get a bank to give her a line of credit. But the majority of her help came from her mother and a private business owner who was willing to take a chance on Fehrenbach.
“My mother was a huge help,” she said. “Without her this business might not have happened. And I had a private business owner loan me the money … and I was able to pay them back in full in one year.”
Fehrenbach said small businesses are what keep people in and draw people to a community.
“You look at (the Sauk Prairie) downtowns and all you see are insurance agencies,” she said. “We are filled with things that don’t draw people into a community. We need more retail shops. When you can provide people with things they need, who benefits the most are the people in the community”
Apple acknowledged a person can do everything right and still walk into a bank and get rejected.
“The best way for a business owner to get that loan is to walk in with a good plan and good projections, and be persistent,” she said. “I know some people who went to 10-20 lenders before getting approved. It takes persistence and constantly looking at what you are showing the lender that will give them confidence in what you are doing. It’s also about timing … during a recession you are not as likely to get approved.”
She said when people walk in with a good plan and are realistic, it tells the lender about a person and what they are willing to do for their business.
Kessenich said he’s found resources such as the chamber of commerce and downtown business groups to be very helpful.
Bobbi Boettcher of the Baraboo Area Chamber of Commerce said smaller businesses thrive when they work together.
“We have a very vibrant downtown, our businesses are very active,” Boettcher said. “The downtown businesses are working to offer a whole array of programs beginning in October for the upcoming holidays. It’s very exciting to see the amount of work togetherness and cooperation with our merchants.”
Boettcher said promoting downtown businesses draws people into the community, which can have an impact on other businesses in the community as well.
“The adage we’ve used a lot is a rising tide raises all ships,” she said. “Ultimately it helps everybody.”
Apple said small businesses are committed to their communities.
“It’s not just them, it’s their families,” she said. “They are part of the fiber. These people aren’t faceless corporations. They are your neighbors. They are the people you know in your community.”
The work isn’t easy and the profits — if any — are generally low. So why do so many people still do it?
“You get tired by the end of the week and you work hard,” Albert said. “But there isn’t anything I’d rather do. It’s about more than money. It takes dedication and you have to have it in your heart. Every little piece of you takes ownership.”
“You really have to have a passion for what you are doing,” she said. “If you have a passion for what you’re selling or doing it overflows onto the people in your shop.”
“The caring, the honesty, the experience you provide to your customers and the relationships you build — it all makes a huge difference,” Kessenich said. “There will always be a segment of the population that wants the anonymity of shopping at a big box store. But right now, people are craving interaction in their experience. They like talking to people. And small business owners, we listen.”