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VOL. 119 | NO. 113 | Tuesday, June 28, 2005

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By Andy Meek

New Business Activity Continues to Rise

Downtown, Hickory Hill tops for business license filings

ANDY MEEK

The Daily News

The problem with how to sum up new business activity in Metro Memphis over the past year is a little like one the Small Business Administration faced in a panel discussion held last week in Chicago.

In both cases, too many question marks rule out simple answers. The SBA hearing was one of 11 being held across the country to help the group retool its definition of small businesses. But the talk was bogged down by such questions as, Should employee size be the determining factor? If so, what about a business that pulls in millions in revenue?

Likewise, the jury is still out on what to make of the competing variables and economic forces that drove local and national commerce in 2004.

Economic indicators. On one hand, the governments most recent job-creation numbers showed only 78,000 last month far less than expected. But other economic indicators are more promising.

Tom Kavanagh, chairman of the Memphis chapter of the Service Corps of Retired Executives, said SCORE has seen a recent uptick in business activity, reversing a decline over much of the past year. And more new ventures are opening 6,365 new business licenses were filed with the Shelby County Clerks Office from June 2004 to May 2005, up from 5,983 in the same period the previous year.

In Memphis alone, 4,661 business licenses were filed up slightly from 4,575 in 2004, according to The Daily News Online, www.memphisdailynews.com.

It has slowed down in the past year or so, and thats been the case nationally for SCORE in terms of the number of people we are seeing, Kavanagh said. But last month it picked up again, so I dont know whats causing it I dont know if its a blip or if its going to continue that way.

It may, if more business owners like David Wang jump into the fray. Wang, owner of Wangs China Bistro, reopened his restaurant about a month ago at 113 S. Main St. after Hurricane Elvis damaged its previous location at No. 1 Beale in 2003. So far, Wang said, the lunch crowd has been large and is growing, and hes excited about the new location.

This is almost like the center of everywhere down here, Wang said.

Downtown growth. Other Downtown entrepreneurs apparently agree. In first quarter 2005, restaurants were part of one of the largest categories of new businesses in Downtowns 38103 ZIP code, that of sales of prepared food and drinks. The largest was the professional services category, which includes lawyers, doctors and architects.

Beyond Downtown, there were few changes in the hotspots for new businesses in 2004. From June 2004 to May 2005, the most new business licenses were filed for ventures in zip codes in the Hickory Hill, Whitehaven and Knight Arnold/Perkins areas.

During that period, 38115 saw the highest total, with 373 business licenses filed. There were 364 in 38116, and 343 in 38118. Those totals marked only small changes from the same period the previous year; all three areas were also at the top of the list a year ago. As in Downtown, most new businesses that opened in each area fell in the professional services category.

And while more Metro Memphis residents are snapping up new homes in suburbs such as Arlington and Bartlett, theres a reason most new businesses opened their doors within the 240 loop in 04. Dr. John Gnuschke, director of the Sparks Bureau of Business and Economic Research at the University of Memphis, said it has to do with an entrepreneurs location and his willingness to go to a different part of the city to run a business.

Investment uncertainty. Kavanagh said an even more dramatic increase in the numbers could have been seen had there been layoffs at a major employer recently.

But we havent had much in that regard recently, he said. That will sometimes get people thinking about going into business for themselves, particularly for those people who maybe are in middle management, and theyre given a pretty good package when they leave the company.

So are the increases good news? Not entirely, thinks Harold Byrd, vice chairman of Bank of Bartlett. Byrd said he is seeing more uncertainty than enthusiasm among investors at the moment.

Even though our loans were up this year over last year and weve had two straight years of increases, weve never worked harder to do it, Byrd said. And I think what youre seeing is theres much less activity and, it seems, fewer players out there trying to get loans. Theres just not nearly the amount of entrepreneurial activity going on now as there was, in my opinion, say five to 10 years ago.

Byrd said most of Bank of Bartletts current business is with established clients or new clients who have been in business several years.

Still, observers see positive trends in the numbers. Gnuschke, for example, said they show a strong level of entrepreneurial activity, even in traditionally poorer neighborhoods. SCORE also remains active in counseling business owners, holding seminars and reaching out to new entrepreneurs.

 

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 51 334 9,936
MORTGAGES 41 330 10,946
FORECLOSURE NOTICES 0 12 1,301
BUILDING PERMITS 348 1,216 22,173
BANKRUPTCIES 43 348 6,311
BUSINESS LICENSES 30 142 4,081
UTILITY CONNECTIONS 19 127 3,019
MARRIAGE LICENSES 20 105 2,126