VOL. 119 | NO. 127 | Tuesday, July 19, 2005
Business License Filings Remain Steady
By Andy Meek
Gasoline prices are edging upward and U.S. consumers are generally pessimistic about the national economy, according to a report released last week by Investor's Business Daily and TechnoMetrica Market Intelligence. But these factors haven't slowed the amount of new business activity happening in Memphis.
Year-to-year rise. A total of 1,327 new business licenses were filed with the Shelby County Register of Deeds between April and June, up from 1,269 filed during the same period in 2004. The number also marks an improvement from 1,299 filed in second quarter 2003, according to The Daily News Online, www.memphisdailynews.com.
Harold Byrd - vice chairman of Bank of Bartlett, which has financed new businesses throughout the Memphis area in its 25-year history - doesn't necessarily believe the numbers reflect an economy in its prime. But some other businessmen foresee improvement on the horizon.
One of them is Mark White, co-owner of Grand Events and Party Rentals, who said the increase paints a favorable picture of the local market.
"In our business, of course, we work with just about any business that's out there, and I think we're up 19 percent for the year," said White, chairman of the Memphis Area Action Council, a local partner of the National Federation of Independent Business. "So the economy's good, people are out there and things are moving up."
Edging upward. 'Moving up' is the theme that emerges when second quarter 2005 is compared with the same period over the last two years. While the number of licenses filed in Memphis proper in 2004 took a drop from 2003, from 1,020 to 962, they edged upward again to 987 in 2005. After Memphis, the second largest area for business activity was Cordova, which followed the same pattern: Business license filings there dropped from 89 to 75 from 2003 to 2004, then climbed to 96 in 2005.
And Cordova could get a boost from the efforts of several business people and civic leaders who recently formed the Cordova Leadership Council, a group whose goals include reviving the area's business community. CLC members include Olliette Murry-Drobot, senior program officer with the Memphis Community Development Partnership, and Mike Ritz, the first director of the Memphis and Shelby County Office of Planning and Development in the 1970s.
Hotbed for activity. Dr. John Gnuschke, director of the Sparks Bureau of Business and Economic Research at the University of Memphis, pointed to one reason, in particular, that Cordova has been a magnet for new businesses: Germantown Parkway.
"The movement along Germantown Parkway and the high income level of people in that marketplace makes that a profitable place to start businesses," Gnuschke said. "Developers have gone wild in that area."
The relatively low cost of filing a business license is often cited as a reason behind increases in total filings throughout the Memphis area. For businesses within Memphis, owners must purchase a Memphis and Shelby County business tax license for $42. For a business in unincorporated Shelby County, the cost is $22.
"The movement along Germantown Parkway and the high income level of people in that marketplace makes that a profitable place to start businesses. Developers have gone wild in that area."
- John Gnuschke
director, Sparks Bureau of Business and Economic Research
Business types. But whatever the reason, most of the new business licenses filed in second quarter 2005 fell under the professional services category. There were 562 that fit the Shelby County Clerk's official description of the category, everything from medical to accounting, insurance to veterinary offices. In addition, 218 licenses fell under the category of miscellaneous sales, and 211 were construction-related businesses.
The month of April saw the most second quarter filings for each of the past three years, while June was the weakest month. This year, there were 651 new business licenses filed in April, followed by 488 in May and 188 in June. In second quarter 2004, 599 licenses were filed in April, 410 in May and 260 in June. There were 568 filed in April in the same period in 2003, then 415 in May and 316 in June.
Gnuschke said the ebb and flow of business license totals generally parallels overall changes in the Memphis business community.
"And you're going to see a lot of activity with people coming and going as businesses get licenses and succeed or fail," he said.
Local hotspots. Judging by second quarter totals, one thing that has changed little in recent months is the list of areas where entrepreneurs are most likely to start a new venture. The 38116, 38118 and 38115 ZIP codes have topped the list since second quarter '04 for most new business licenses filed. And since second quarter 2003, there have been year-to-year increases in both the 38116 and 38118 ZIP codes: From 2003 to 2005, business license totals in 38116 rose from 81 to 89, and in 38118, from 59 to 87.
That level of activity is encouraging to White, who said - the national economy notwithstanding - there are some positive indicators in the local market.
"The economy, I think, is doing well right now in Memphis," White said. "From everything we can see, from what we're doing in our business, things are just moving forward."