After years of merely trying to hang on, nine out of 10 Orange County business owners who responded to a Register survey expect their business revenues to grow in 2012, and more than 7 out of 10 expect to be more profitable too.
However, they are much more cautious about the economy in general with about 64 percent anticipating a little growth and most of the rest expecting no economic growth or even a decline.
These people who are on the front lines of the fight for growth reflect a better outlook expressed by consumers in the latest Conference Board survey that found the expectations index hit 76.4 in December up from 66.4 in November. And an Associated Press survey of leading economists found a consensus of about 2.4 percent economic growth in 2012. Estimated growth in 2011 has been less than 2 percent.
Susan Johnson, chief executive of Susan’s Healthy Gourmet and Xan Confections in Irvine, is typical of the optimistic Orange County respondents. After having to lay off 20 people in 2011 when a government contract ended, Susan’s has streamlined processes, prepared a new 2012 menu, hired a national sales person for Xan’s and beefed up marketing for its line of healthy, delivered meals.
“This was a rebuilding year,” Johnson said of 2011, “and we’re looking for expansion” in 2012. “I think the economy will improve a little, but it may be all illusory. We are a world economy now and everything affects everything everywhere.”
Kim Jorgenson, owner of Plums Café and Catering in Costa Mesa, said, “We are expanding our business – more seating – spending more on marketing and creating new offerings for our customers.”
Plums is now also offering dinner in addition to breakfast and lunch service.
Thomas Martin, president of Martin Investigative Services in Newport Beach anticipates that new efforts to be more visible to corporate clients will boost his revenues as much as 12 percent. However, he’s less certain about bigger profits. “Inflation, cost and health benefit increases and where the payroll tax will finally land in 2012…are not within our control.”
After dismal 2009 and 2010 because of construction industry declines, Dan MacLeith, president of Pacific Westline Inc. in Anaheim, said, “2012 does appear much better at the onset so expectations are for continued growth.”
Audrianne Adams Lee, owner of HR Network Inc. in Garden Grove, expects 2012 revenues to grow because she has added new products and services. She expects profits to grow because “with the recession we learned to work lean and we’ll continue that practice.”
The most upbeat respondent was Tim Telles, owner of Tribeca Salon in Aliso Viejo. “2012 is going to be Tribeca’s biggest year,” he said.
ECONOMIC DOUBTS
Most Orange County business owners joined Johnson in views of the economy that ranged from cautious optimism to doubt.
“I think it will improve – a little,” said Hilary Kaye, owner of Tustin public relations firm HKA Inc. “I don’t expect tremendous gains in one year after multiple years of such bad unemployment and troubled companies.”
Bob Richardson, owner of RWR Marketing & Graphic Design in Huntington Beach, also expected a little improvement. “Even with our dysfunctional government, state and federal, I think businesses will do what is necessary to survive.”
Jorgenson of Plums was more skeptical. “I believe (the economy) is still fragile enough for another collapse or negative shift, particularly with the challenges facing Europe and other tumultuous world influences.”
And most negative of all was Christopher Mott of Mott’s Miniatures and Doll House Shop Inc. in Placentia. “I don’t see it improving. What has changed? We’re still bailing ourselves out from what George Bush did to us. Obama hasn’t fixed anything. Congress still bickers over balancing the budget.”
WHAT NEEDS TO HAPPEN
When asked what their businesses need for success in 2012, the responses ranged from government action to personal attitudes.
Mott blames the economy on companies sending jobs overseas and wants federal laws to stop it.
Richardson said government helped big businesses during the recession. “My hope is state and federal government will pay more attention to the little businesses: offer worker’s comp relief, eliminate paperwork red tape, keep sales tax low, don’t tax services, provide easier access to funds for expansion, provide better alternative energy rebates and offer lower unemployment premiums.”
MacLeith said, Banks “abandoned their role in our system and the government has allowed them to make more money NOT being a bank than how it worked in the past…Banks need to start lending to small business again.”
Nazar Al-Jamie of A.J. Electric in Tustin agreed. “Business capital (needs) to become available for expansion.”
Peter Shikli, head of Bizware Online Applications Inc. in San Clemente, said, “Blaming the government is great for cocktail parties but doesn’t get us off the hook to deal correctly with the mix of threats and opportunities that government is just a part of.”
Dean Soll, president of SubZero Contractors in Rancho Santa Margarita, said his industry needs to regain skilled workers who left construction in the recession. “As things have ramped back up for us in the past 12 months, it has been difficult to find enough skilled labor to handle the construction volume.”
Amit Okhandiar, president of MLogica in Orange, said businesses must have more confidence in order to grow and boost the economy. Diana Hill, a real estate investment trainer, said people themselves must “believe the worst is over and be willing to invest.”
Attitude is important, said Carl Hagmier, owner of Nett Solutions Inc. in Aliso Viejo. “My company needs in 2012 for my employees to stop blaming external factors for their…poor sales performance. They want to use the economy as the factor but that is just a poor excuse.”
Deal Del Sesto, chief executive of Breviti in Newport Beach, “Maybe it’s just me but there’s something refreshing about completely tuning out of what economic salvation may or may not come down the political pipeline and getting back to the passion and work ethic I had when I started in business. (Success in) 2012 will be directly proportionate to the commitment I put into it.”
BIGGEST BUSINESS STORY OF 2012
Orange County business owners were asked what they thought would be the biggest business story of 2012. More than half said the elections. Don Dressler, partner in Workforce Consultants in Irvine, elaborated. “Will the voters of California and the U.S. continue to support new office holders who focus on reducing the size and cost of government?”
Ron Stein of PTS Staffing Solutions in Irvine said he is joining a coalition of California business people to make the biggest story of 2012 the rising costs to state residents and businesses of regulations and taxes of AB 32 Global Warming Solutions Act. “California is not attracting new business creation. Almost a million more people left California than moved her from 2005 to 2011. Transportation fuels are already the cleanest in the county and their costs are the highest in the country…AB 32 may raise that cost another 50 cents a gallon by 2014.”
But Patrick Brenden, chief executive of Home Run Media Group in Huntington Beach, is more upbeat. The biggest 2012 story: “Economic recovery will lead to lower unemployment rates and escalating lease rates and selling prices.”
Contact the writer: 714-796-7927 or jnorman@ocregister.com
