The recession is delivering a double whammy to small businesses just when many need more help than ever. Not only are small businesses struggling, but so is their support network.
Shrinking sponsorships and membership dues are hurting nonprofit groups that cater to small and minority-owned businesses. The lack of funds can create cash flow and budget problems.
“Everybody is just taking a good, hard look at how they’re spending their money and making sure they’re getting value for it,” said Bob Stimson, president of the Oak Cliff Chamber of Commerce.
Small businesses employ more than half of the U.S. private workforce and help fuel the nation’s economic engine. Small businesses often lack the capital and resources to weather economic downturns. Chambers and other community groups provide business advice, training, networking, resources and office space, and help find financing.
For most local chambers, the economy’s biggest impact has been on corporate sponsorships, which help pay for member services and fundraising events such as galas and golf tournaments.
The Dallas Black Chamber of Commerce said one company eliminated its $7,500 sponsorship of the chamber’s annual banquet this fall. The Oak Cliff chamber saw a local bank cut 2009 sponsorship to $2,800 from $5,000, Stimson said. Overall, he expects the group’s revenue to decline 20 percent this year.
“Corporate sponsors have really dillydallied their financial decisions,” said Galileo Jumaoas, executive director of the 1,200-member Greater Dallas Asian American Chamber of Commerce. “If they don’t pay or pay less, then we can’t pay our bills.”
So far this year, the Asian chamber has seen one sponsor halve its contribution to $7,000 and another cut its $25,000 donation to $5,000, Jumaoas said. The group’s 2009 budget is down $100,000 from last year, and it has laid off four employees in the last 18 months, he said.
The 2,100-member Greater Dallas Hispanic Chamber of Commerce has seen membership decline, which has constricted cash flow and led to higher accounts payable, said board treasurer Alissa Salas. The group, the largest U.S. Hispanic chamber, has adopted a quarterly budget this year instead of an annual one to respond faster to the economy.
Chambers are looking to cut costs and become more efficient, but many of them already operate with small budgets and staffs. So far, member services haven’t been cut at the Dallas Regional, Asian, Hispanic, Black or Oak Cliff chambers.
The Oak Cliff chamber recently brought graphic design in-house, Stimson said.
The Asian chamber’s Jumaoas has modified some events this year:
—It has begun charging vendors and speakers to appear at meetings and seminars.
—It will combine three events.
—In February, it halved the cost of a board induction lunch by trimming the attendees to 150 at Prestonwood Country Club from 300 at a large hotel.
Dallas Black chamber leaders met last month to discuss possible changes but decided to “monitor and revisit” the issue at midyear, said president Reginald Gates. He noted that its members already conduct most of its workshops for free.
Entrepreneurs weigh the pros and cons of every expense as they try to control costs.
Last year, the Hollman Las Colinas Business Center quit the Asian chamber because it wasn’t a “good fit,” said Hollman property manager Hillary Razo. Instead, the business has joined groups in Irving.
The Dallas Regional, Hispanic and Oak Cliff chambers are more aggressively recruiting members and trying to become more useful to them.
The Dallas Regional Chamber is doing more public policy work and is planning to form a stimulus task force, spokeswoman Lauren Parsons said.
“More so than ever, people are looking for more networking events because they want to grow their businesses,” she said. “We’ve heard from people we haven’t heard from before.”
The Oak Cliff chamber’s aggressive marketing and new programs have helped membership jump nearly 60 percent to more than 500 in the last two years, Stimson said.
Clarence Bowman, an independent salesman for Pre-paid Legal Services Inc., paid $250 to join the Oak Cliff chamber about six months ago because it’s near where he lives. He also belongs to a business networking group, BNI, but is holding off on joining other groups because of time and resources.
“If you stretch yourself too thin, you’ll have no time to do business,” Bowman said.
(c) 2009, The Dallas Morning News. Source: McClatchy-Tribune Information Services.