NEW YORK (AP) — For some small business owners, the Great Recession turned out to be a lesson in how to run their companies better.
Many owners whose businesses failed during the recession have taken the plunge again, restarting or opening new businesses. But they're not repeating past mistakes. Their companies are leaner, smarter and less risky.
There are no definitive numbers on how many small businesses failed during the recession. But there were 337,303 fewer companies with under 499 employees in 2011 than there were before the recession began, according to the Census Bureau. The government hasn't released more recent statistics, so it's not known how many new companies there are, or how many owners went on to start new businesses.
Here's how some of the companies are making sure they are more recession-resistant:
INTERNET, NOT INVENTORY
Let someone else take the risk. That's the lesson Frank Muscarello learned from the recession, and the strategy he's used in building MarkITx, an online marketplace where companies from Fortune 500 corporations to the smallest businesses can buy and sell refurbished computers, servers and other high-tech equipment.
Muscarello started Chicago-based MarkITx in December 2009, right after he lost his previous business, Vision Point of Sale, in a bankruptcy auction. That company failed after its bank suddenly demanded collateral on a $3.5 million loan during the credit crisis in 2008. While Muscarello had cash registers worth millions of dollars, the bank considered them almost worthless because they couldn't all be sold within 90 days. Without collateral, the bank called the loan, and because Muscarello couldn't quickly sell his cash registers, he didn't have the money to repay it.
"I never wanted to be in the inventory game again," Muscarello says.
MarkITx doesn't hold any inventory. Its website lists equipment for sale, and helps sellers set a price. The company takes payment from buyers and holds it in escrow until the machines are delivered. It also arranges for equipment to be shipped to a separate company that inspects it and refurbishes it. The website, which began operating in April 2011, has more than 2,300 users.
MarkITx is less vulnerable to economic downturns, Muscarello says.
"I need an inventory-less business model to really grow," he says.
SCALING BACK AND RESTARTING
Mark Viggiano has improved his restaurant's chances of success this time around by scaling back. He's serving only dinner, not lunch, at Viggiano's BYOB, and is closed Mondays, typically a slow day at restaurants.