Brave or foolhardy?

During this time of economic downturn, many people need to cut back on expenditure, whether that is a weekly treat from a clothes shop, a regular meal out with friends or even price-watching between grocery stores. However, a mantra that is often trotted out is that a recession can be the best time to start up a new business. And indeed, within the last year, more than a handful of new ventures have sprung up around Athlone. DANIELLE HARNEY spoke to a few of these brave entrepreneurs to see what it's really like opening shop during a recession. The Restaurant... One of Athlone's newest businesses is the quirkily-named De Mad Hoor, a quality fast-food restaurant attached to the Towncentre but accessible from the Civic Square. Proprietor Brendan Cleary has over 20 years experience in the family business - the well-known Glenisk dairy products based in Killeigh. So he's had experience of working through a recession before and knows what it's like. But this time he's out on his own and has had a baptism of fire since he first started working on the restaurant idea last Christmas. He agreed that the reaction from many people was that he was mad to start up a business during a recession. "I've always had an inclination to open up a business on my own, in the food industry. But in a recession, food still sells. During the great depression in America, the soup kitchens were still busy. I wanted to offer fast food with an Irish angle. There's so much emphasis here on American, Chinese or Italian food so I thought there must be something out there I could take on with an Irish theme," said Brendan. "It's definitely more of a learning experience setting up during a recession. Five or ten years ago, a lot of businesses opened that shouldn't have survived, because people accepted a second rate service and standard," he added. Of the unique business-name and the memorable dishes of burgers, fish, sausages and side servings, Brendan said he had to do something to grab people's attention and attract a younger crowd. "We're competing with international players, so we have to use innovation and wit to get them in," he added. And of course, it's about providing quality, locally sourced ingredients and great service. "In this post-Celtic Tiger age, you have to provide value for money and a higher level of quality to casual dining." And his verdict after being open less than a month? "It's not been easy but one problem is we're not big enough. We need more seating and it's awful having to turn people away, but I suppose it's a good complaint. But we have to already start re-designing ourselves." He added that his father was a "firm believer" in hard work, and achieved success through graft and innovation. And Brendan is taking one step at a time with his Athlone venture, which employs 14 full and part-time staff, although he is cautiously optimistic about what the future holds. "The objective is not to become a multi-billionaire, the objective is to give us a wage at the end of the day," he said. "I want this to be a successful business model in Ireland. We have to first be successful here in Athlone, whether that's expanding up or down and then hopefully, Ireland is our oyster... It's one step at a time, but I'm confident we'll get past year one." He added that Ireland is still an expensive place to do business in and that in the food industry, it costs a lot to implement all the relevant health and safety legislation. His advice to people who may be thinking of starting their own business is simple. Have the finance to absorb a loss if needed, use your own inner-strengths and take small steps. Also, over-budget for everything! The Newsagents... Business is booming for the newly-opened newsagents in Golden Island shopping centre. Because Xpress News took over a ready-fitted unit, start-up costs were not as hefty as for some new SMEs and the busy nature of the shopping centre made it an ideal spot for Gort businessman Billy Shearer. "The location was a big factor, some of our other shops are in housing estates or are corner shops, but the one in Golden Island is holding up great during this recession. Tesco and Pennys are still attracting so many people who are then coming into us. People are still buying minerals, newspapers and sweets." Billy said that during a recession, people still want to treat themselves, but are conscious of the cost-factor, so a glossy magazine or a bar of chocolate is always going to be a popular and relatively cheap option. "I've seen in the last six months, groups of teens or people in their 20s, who are coming in to get magazines or sweets. Now they're spending €10 whereas before it would have been €50 on clothes or jewellery." He said that there's on increase in the sale of birthday and greeting cards, and many people now pop in a scratch card or lotto ticket with it, instead of spending lots of money on a big present. They also sell picture frames and small toys. However, one problem for the businessman, who owns a chain of newsagents around Galway as well as the Athlone one, is that the banks are not supporting small and medium businesses. "My only quibble is that we can't do it again. We'd no fit-out costs for the Athlone newsagents, we only had to pay for the signs and the counter, but we can't open another shop now as we can't get a loan from the banks. If I wanted to open one in Mullingar or Longford, I'd have to sell another," explained Billy. "It's crazy stuff. There's great opportunities out there for SMEs but the banks are running them out the door." He said that banks need to start supporting small and medium businesses at a local level. He said that although the bank manager in Athlone was supportive of the new business, HQ in Dublin refused to increase the business overdraft. He said that this reluctance by banks to give out loans or extend overdrafts means that many people who may have been made redundant are being prevented from starting up their own business. "I'd open up in another unit here in November and December, selling toys and teddies in time for Christmas, but only if I can get the support from the banks." The Hair and Beauty Salon... Business has grown and steadily improved for the Bee Hive Aveda Salon in the Left Bank Mall which opened just before Christmas. The natural hairdressers and beauty salon stocks Aveda products and provides the Aveda experience, which is its unique selling point to customers looking for value for money and that little extra now that they're keeping an eye on the pennies. Manager Stella Geraghty, who has worked in the marketing and sales industry for 13 years, said that the hard times have pushed her and proprietor Imelda Geraghty, to introduce special offers and benefits for customers. "We've introduced a new loyalty card, which is a way to reward our existing customers and encourage others to come to us. The more they spend with us, the more we give back," said Stella. She pointed out that customers shop around and want value for money, so the loyalty card offers them something extra, something to encourage clients to come back. Crucially, the more clients return, the better the relationship they build up with their hairstylist or beauty therapist is. Bee Hive is the only Aveda salon in the Midlands and it took Imelda, who's well-known through Circle of Life, a number of years to get the agency to sell the products here. It just so happened that she got the go-ahead to become an Aveda agent while things are not so good in the Irish economy. But Aveda's ethos still appeals to a lot of people who are more aware about what they put into their bodies, said Stella. "We're very positive about the product. Aveda is 97% chemical-free and organic and nowadays customers are so aware of chemicals causing cancer, they want to use organic products and chemical free products, yet we're still selling at competitive prices." And the salon also offers that little bid extra, which means customers get more value for their money. "From start to finish, it's the whole experience. The client is greeted at the door, then there's a consultation with a beautician or stylist during which you receive a hand massage, then when you're getting your hair washed you get a five minute head massage and a cup of herbal tea. There's also a complimentary make-over offered after your hair is done, to give you a perk when you're about to leave... It's the wow factor that's value for money and more than just a hair style," explained Stella. All in all, Stella believes the salon will thrive, with September and the pre-Christmas rush only getting busier. "It's difficult times, trying to get bills paid and get money from banks, but we're here to stay."