Economy growing, but still no paradise for small businesses - WXOW News 19 La Crosse, WI – News, Weather and Sports |

Economy growing, but still no paradise for small businesses

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LA CROSSE, Wisconsin (WXOW) -- La Crosse's Jade Cafe, located on West Avenue, will close for good Sunday. 

Owner Ryan Niemeier said the restaurant, coffee shop and frozen yogurt bar has struggled to turn a profit since it opened last August. 

"The sales weren't there, the foot traffic wasn't there," Niemeier said. 

Niemeier added part of the reason the store couldn't make it was because of issues with his former business partner. He also said the cafe's location, close to campus, made for slow spells during winter and Thanksgiving breaks. 

"We'd be at capacity one day with students in here studying for finals, and the next day we'd be empty," he said 

But Dr. Taggert Brooks, a professor of economics at the UW-La Crosse, said Niemeier is likely one of many small business owners struggling to succeed in a sluggish economy. 

"There's no doubt economic crises like we had, and recessions, definitely affect restaurants," Brooks said, adding restaurants tend to rely on discretionary spending. He said people tend to have more to spend when the economy is booming. 

"People can pull back on that spending, and often do," Brooks said. "Restaurants are exposed to that. So you see a lot of restaurant failures when that happens." 

Brooks said the best indicators of economic growth nationally are gross domestic product, or GDP, and the size of the American labor force. 

GDP grew by 2.4 percent in the first quarter of 2013. 

"The last six, seven years, we've experienced lower than average economic growth," Brooks said. "Typically, when you have a large recession, you tend to have pretty robust growth coming out of it. You have 3.5, 4, 4.5 percent growth rates." 

"We haven't really seen that," Brooks said. 

The federal government also reported the creation of 175-thousand jobs in May. 

Brooks said that's a good number, although it's below the 200-thousand jobs benchmark he said the country needs to create monthly to keep up with population growth. 

"We've experienced very tepid growth," Brooks said. 

"But it's been getting slowly better," he said. 

Niemeier said he doesn't follow the national numbers much. He said he doesn't know if Jade Cafe failed to turn profits because of a lack of discretionary spending, but acknowledged the restaurant did struggle to get exposure and build up a client base. 

"There was a struggle getting our name out there and our product, because we weren't a franchise," Niemeier said. "We were just a couple people trying to open up a restaurant... and people go to what they know." 

Niemeier, an engineer by trade who works full time at Century Link, said he's not ruling out attempting to start a small business again in the future -- despite losing more than $100-thousand on Jade Cafe. 

But he said he wishes he'd had more guidance on venture number one. 

If he could sit down with the President, the Governor or other elected officials, Niemeier said he'd recommend the government set up new, small business owners with more experienced members of their industry that can help them get going. 

"I needed resources to ask about questions I didn't know the answers to," Niemeier said. "For instance, what percentage of your monthly sales should be paying for rent? what percentage of your sales should go to wages?" 

"If I'd had that counsel a year, year and a half ago, I would have made different decisions than I did make since we started," he said. 

The University of Wisconsin-La Crosse does have a small business development center -- aimed at helping businesses get up and running using grants and other resources. 

But Niemeier said, while the development center and the small business association do offer some of the resources he sought, he felt they were "limited." 

 

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