Savannah small business outlook remains rosy

By The Creative Coast | June 25, 2015

Article in the Savannah Morning News by Mary Carr Mayle Bea Wray, executive director of The Creative Coast, summed up the sentiment at Wednesday’s third annual State of Small Business forum with a baseball analogy. “The bases are loaded in Savannah,” she said. “We have the talent, we have university and technical college support, and we have an incredibly desirable location. “Let’s swing for the fences.” Indeed, all 10 speakers agreed the outlook for small business in Savannah is good and getting better. From job growth to construction permits, from revenues to new start-ups, small businesses in Chatham County are, for the most part, healthy and growing. And the resounding theme for the crowd of 300-plus who gathered in the ballroom of the Savannah International Trade and Convention Center was clear: You don’t have to go it alone. Cristy Llewellyn Lawrence, development services liaison for the city of Savannah, outlined the city’s streamlined business approval process and touted the addition of a business approval coordinator to provide hands-on help. Tony O’Reilly, president of the Small Business Assistance Corporation, reminded business owners that his organization offers 13 different financing options for projects ranging from $2,500 to $5.5 million in scope. Becky Brownlee, with the University of Georgia’s Small Business Development Center in Savannah, urged small business owners to take advantage of her organization’s free business counseling. “Working with SBDC, working with SCORE – that can be game-changing for a small business,” she said, adding the statistics to back up her comments: “In 2012-2013, Savannah SBCD clients increased their employees by 11 percent and increased sales by 8 percent. And, in 2014, they qualified for 469 loans totaling $162 million.” Looking at the numbers Each of the speakers provided benchmarks for their areas of expertise. Susanne Toney, assistant professor of economics in the College of Business Administration at Savannah State University, looked at unemployment rates as well as Savannah’s gross metropolitan product, or GMP. “The Savannah unemployment rate — 5.5 percent in April and still trending downward – is below the state at 6.3 percent, indicating that more of the labor force is employed in this area,” she said. “That’s a positive sign for small business as more consumers should have the ability to purchase goods and services.” Savannah’s GMP, which encompasses Chatham, Effingham and Bryan counties, is second only to Atlanta’s, and is projected to increase by 3.1 percent this year, up from 2.1 percent in 2014. “Increased output is another positive growth indicator, with spending and income implications that should positively impact small business,” Toney said. Longtime Savannah real estate broker Rhett Mouchet said commercial real estate benchmarks for Savannah continue to look good. “The overall office vacancy rate fell in 2013 from 10 percent to 8 percent,” Mouchet said. “That number has continued to decline and is currently at 6.3 percent.” The general retail market has gone from a vacancy rate of 6.2 percent in 2013 to 5.7 percent today, he said. Although the drop is only a half-percentage point, the increase in product, mostly from the new Tanger Outlet Center in Pooler, amounted to more than 600,000 square feet of new space, Mouchet said, adding that specialty retail centers are experiencing near zero vacancy levels throughout Savannah. But the real star of the real estate show is in the industrial sector, where the vacancy rate was slightly above 30 percent at the height of the recession. “Today it is at 5.2 percent, a drop that clearly shows the strength of the Georgia Ports and the attraction of industry and distribution at the Port of Savannah,” he said. Even Savannah’s largest industry is dependent on small business, said Marshall Tuck, corporate small business officer at Gulfstream Aerospace. “In building the world’s most technologically advanced business aircraft, Gulfstream relies on quite a few small businesses,” he said. In the past four years, Gulfstream procurements have increased from $575 million to $765 million, with small business procurements up 34 percent, Tuck said. In 2014, Gulfstream spent $160 million with small businesses in the Coastal Empire and Lowcountry, $130 million of that in Savannah, Tuck said. “Small business is our bread and butter.” More positives Other trends outlined Wednesday indicated small business in the area is moving in the right direction: • The number of jobs in Savannah grew by 2,800 in April, most of the gains coming in professional and business services, leisure and hospitality and retail. April job gains were up 4.6 percent year over year. • Initial unemployment claims declined to 717 in April, down 15.8 percent over the previous month. Year over year, claims were down almost 21 percent. • The value of construction permitting in Savannah in 2014 was $334 million, down slightly from $342 million in 2013. • Approximately 7,300 businesses were active in Savannah in 2014, paying a total of approximately $4 million in taxes. Of those, nearly 38 percent reported gross receipts of $100,000 or less and 75 percent indicated they had 10 or fewer employees. Some 750 new businesses paid taxes last year.