Service Businesses Thriving, Despite Slow Economy
by Jane Applegate

You can't throw a rock these days without hitting an economist who will confirm the U.S. economy is officially in a recession. But despite the general slowdown, many small businesses serving busy people and their pets are flourishing. "People still have more money than they have time," said Erin Erman, an Atlanta-based entrepreneur who runs a pet poop scooping service called "Dirty Work."

Erman serves both residential and business customers. She said her hotel business has "at least doubled" in the past year because so many hotels are making an effort to accommodate guests with pets.

Though Dirty Work lost about 35 clients in the 48 hours after Sept. 11, some are coming back and she has kept busy by offering temporary price breaks and offering credit to some clients. Her fee is based on the number of dogs and the number of visits, but averages about $10 per week.

"I'd rather have a full day of happy clients at a reduced price than visit two homes in one day at full price," says Erman, who loves her work despite the challenges. "We get to be outside and see tons of dogs in a day, which is terrific."

Another dog-related business, started by a former hotel executive, is also thriving. Jean Beuning opened the "Top Dog Country Club" in New Germany, Minnesota just about a year ago, with the hope of breaking the first year. "I promised my husband that I would at least breakeven in the first year, but not to expect anything beyond that," says Beuning. "Well, I blew that (projection) out of the water." Instead of breaking even, Beuning has made enough money to match the executive level salary she left behind when she quit her job at Marriott Corp. to start her own deluxe doggie hotel.

Situated on 42 acres of wooded property in rural Minnesota, the 5,000 square foot Top Dog building features stone floors (with in-floor hot water heating) textured plaster walls, nine-foot ceilings, and forty-six suites. Top Dog's guests sleep on wrought iron beds with orthopedic mattresses and listen to bedtime stories every night. It's so luxurious that dogs from as far as Montana and Missouri check in, although most of Beuning's business comes from the nearby Minneapolis-St. Paul metro area.

Although Top Dog offers luxury-level service, at $35 at night, it is competitive with kennels that offer basic food and shelter. Annie Grose, a Top Dog client, said she was paying about two and a half times as much to find private dog sitters for her dogs, Lucy and Nell.

"You take your dog to a kennel and it's a business," said Grose. "You go to Top Dog and they remember you and your dogs. In the circles that I travel in, that's a really big deal."

Like a growing number of Americans, Grose cares deeply for her dogs, and expects them to receive good care even when she leaves them behind. Beuning reports that about 95% of Top Dog's clients are people who would never board a pet at a kennel. While there is a growing trend among kennels to offer better service and accommodations, she said Top Dog takes its celebrity pet treatment further than most competitors.

Her greatest challenge in the first year has been finding and keeping great employees. "It's not easy to find people that can display the same level of passion that I can," she says. "So when you find great people, you have to hang on to them."

Penny Sparks, who runs a homeowner referral service in West Hills, Calif., feels the same way. "I think about Nordstrom a lot, and what they do when it comes to customer service," said Sparks. "When that sales lady is standing outside your dressing room, asking if it fits, or you need another size, or another style, they are doing it right."

Sparks is one of 217 business owners in a network started five years ago by another passionate service-entrepreneur, Debra Cohen. Cohen left her full time job at a Spanish language aviation magazine when she was pregnant. After staying a home with her baby a few months, she became restless.

"Staying at home can be very boring for any woman who's had a career," said Cohen. So, with a $5,000 loan against her husband's IRA, Cohen founded Home Remedies of New York, a homeowners' referral service based in Hewlett, New York. She describes her concept as "a personnel agency for the home."

Using her natural aptitude for connecting people, Cohen started her referral network with a great decorative painter and a handful of fliers. Soon after Cohen was profiled in New York Newsday, her business really took off. In addition to calls from scores of homeowners looking for her help and contractors hoping to be recommended, Cohen received calls from people who wanted to start their own businesses modeled on Home Remedies.

Knowing she didn't want to expand her business, create a franchise or increase her work week beyond 20 to 25 hours, Cohen figured out a way to help others set up businesses based on her model.

Prospective business owners, like Penny Spark, can choose from several pre-packaged business starter kits that Cohen sells. A complete package costs just under $3,000 including the manual, forms, customized promotional items, web template and eight hours of consultation time. New owners create their own name and there is no royalty arrangement.

From that first half dozen phone inquiries, Cohen has helped launch more than 200 referral services, including two in Canada, one in Chile and another in Australia.

What these service business owners have in common, is a strong background in the service sector. Erman ran a computer-consulting business before starting Dirty Work, Beuning was a former Marriott executive and Spark ran a medical supply delivery service before selling it.

"Meeting people's needs is meeting people's needs," said Spark. "I have competition," says Spark, "but they're not doing it right. They don't understand that this is about service. It's difficult to maintain really good personal service and grow. That's a huge challenge."

Reporting by Sarah Prior.

Jane Applegate is a syndicated columnist, author and chair of the Back on Track America™ coalition. With the help of Amtrak and America Online, BOTA is conducting free business-boosting workshops and events in cities across the U.S. For a schedule and dates, visit: http://www.backontrackamerica.com/.