Small business: Clark County's economic linchpin

Sunday, March 9, 2003
By JONATHAN NELSON, Columbian staff writer

Talk of the economy, struggling or otherwise, always leads Gail Haskett back to the same place her 68 employees.

Haskett, president of Northwest Healthcare Inc., took the failing Vancouver business that provides in-home health care to seniors and in four years expanded its size ninefold. She has secured lucrative contracts, recently bought the building that houses the company's headquarters and developed a reputation for providing quality service.

Yet the same worries revisit Haskett.

"I often times at night think of the people that work for me and how much I owe them," she said.

The concern is understandable given the impact these companies have on Clark County's economy. Payrolls at small businesses, which the Small Business Administration defines as companies that employ up to 500 people, rose steadily in the county between 1997 and 2001 going from $381.1 million to $515.5 million, according to the Washington Employment Security Department. That figure retreated slightly last year to $503.2 million.

An estimated 7,613 small businesses provide jobs for approximately 68,000 people. The heaviest concentration of these jobs is in wholesale trade, retail and health care.

The Bush Administration and economists consider small businesses such as Haskett's the backbone of the nation's economy. Companies, from a one-person shop to several hundred employees, provide an estimated 60 percent of all the jobs in the county.

Tough economic times like those gripping the country, today, create a breeding ground for new business owners who decide to take control of their financial fate. That is evidenced by the spike in SBA loans granted to Clark County companies. In 1997, the federal agency issued 27 loans that totaled $5.4 million. By 2002 that number increased to 71 loans totalling $21 million.

Last week the SBA lifted the five-month cap on loans from $500,000 to $2 million to help stimulate further growth.

"Boeing alone leaving does not bring us down, the (closure of) smaller companies does," said Carolyn Logue, Washington director of the National Federation of Independent Business.

Logue said there are 335,000 businesses with 50 employees or fewer in Washington. She said the number has remained steady the past few years with almost an equal number of new businesses opening and others closing. In Clark County, the number of small businesses grew from 6,546 in 1997 to 7,613 in 2002, about 1 percent a year. The average NFIB member grosses $350,000 a year.

National studies indicate small businesses account for 99 percent of all U.S. companies, employ more than half of the country's work force, are responsible for 52 percent of the U.S. gross domestic product and create more than two-thirds of the new jobs. Experts say those numbers hold true for Clark County.

Bigger impact here

Brad Robertson, director of the business outreach program at Portland State University, said the impact of small businesses is felt greater in Southwest Washington because of the scarcity of Fortune 500 employers. It takes the production of hundreds of small businesses to fill that void.

Robertson and Conrad Lee, regional administrator for the SBA, said small businesses have propped up the nation's economy during the recession and will lead the country into better financial times.

"They are more entrepreneurial, innovative and flexible," Lee said. "As a result, they are important to the economy."

But aside from creating an economic benefit, small businesses provide key social functions that help define the country. Lee, who classifies himself as an immigrant, said small businesses give immigrants the easiest entry into the work force and help in their assimilation. In exchange, these newcomers bring a new perspective and energy to the community.

Robertson said the owners are not itinerant landlords, but often your neighbor or the parent of your child's friend. They are civic leaders. They develop roots and start businesses for reasons that don't focus solely on money.

Childhood vision

Haskett's fate as a small-business owner was set as a young girl. She had watched the dignity slip away from her aging grandmother who lived in a nursing home. The old woman was often shackled to her bed.

Haskett remembers one visit when as a 13-year-old she and her grandmother held hands for a long time. When Haskett had to leave, her grandmother refused to break the bond until a nurse pried their hands apart.

Haskett thought seniors deserved more dignified treatment and vowed to change the industry. After 14 years as a nurse, she realized in 1992 the only way to institute change was to start a consulting business.

The job still lacked the impact Haskett wanted so in 1999 she put her MBA and years of administration experience to use by buying an in-home health care business. Haskett sought a failing business with a motivated seller and found one in Vancouver.

She had already spent two years studying the market, analyzing her competition and developing her business plan. She bought the business for $60,000 using her savings. She expected to lose money the first year and spent $30,000 more covering losses during the first six months.

By the seventh month, the company was in the black and has stayed profitable since, Haskett said. The business, which had seven employees when Haskett bought it, now has 68.

Haskett attributes her success to careful planning, sound finances and never wavering from her goal of maintaining a high level of customer service. The number of hours she works continues to surprise her as does the amount of taxes the business pays.

Haskett expects continued success with an aging population. But she knows to remain successful, the company needs to adapt. "You're either going to be a monolith or willing to evolve, and you'd better evolve or people are going to pass you by."


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