Volume 5, No. 3
May 2009

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In the Ann Arbor

The Ann Arbor News is Closing

"The DOL May Be Showing
Up On Your Doorstep"
By Mel Muskovitz

Small Business & The Internet
"A2 News, RIP"
By Mike Gould

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local business
people and firms

Real Estate

Ann Arbor Area BUSINESS MONTHLY magazine brings the reader the latest business news and information important to the businesspeople in Washtenaw County. Each month articles cover real estate, legal, Internet, employee concerns and the climate of business in the greater Ann Arbor area. There is news about company employees and feature articles on local businesses. We cover business news from Ann Arbor, Chelsea, Dexter, Manchester, Milan, Saline, Whitmore Lake, and Ypsilanti.

Small Businesses Weather These
Economic Times

Staff of Xoran Xoran leadership (left to right) Pedja Sukovic, President & CEO; Neal Clinthorne, Chairman & Vice President; Misha Rakic, Vice President & CTO and Jacqueline Vestevich, Vice President, COO and General Counsel.

By Alex Harrison

If there is anything these last few months have taught us-nail-biting months spent watching industry executives plead for cash before the Senate banking committee, take their money and run, then return to beg for more-it is that most large corporations are at a severe disadvantage when it comes to making big change in a hurry.

But according to Michael Rogers, vice president of communications for the Small Business Association of Michigan (SBAM), the small business community has remained surprisingly steadfast in stormy economic waters.

"It's been remarkable to see small business owners who aren't doing too badly despite the gloom and doom of the economy, particularly the farther away they are from being tied to the auto industry. They're not wildly prosperous, but at least they're keeping their heads above water, and that's a tribute to the strength and flexibility of the small business economy," says Rogers.

"These thousands of small businesses owners across Michigan have seen the writing on the walls-that they need to change their business plans, advertise differently, come up with different products and services-and by and large they are doing that. They are much more nimble than the big dinosaurs; the big industrial corporations who have been dragging down the state's economy."

Small businesses are facing many concerns; access to credit, health insurance costs and regulations, and worry that excessive government spending now will lead to future tax hikes. However, small businesses nationwide continue to employ half of all public sector employees and create more than half of nonfarm private gross domestic product (according to the U.S. Small Business Administration). With a little strategic management and a lot of perseverance, small businesses can lead the charge in climbing out of this economic slump. The Ann Arbor Area Business Monthly recently spoke with four small businesses that contribute to and enrich our Ann Arbor area economy.

In the heart of Ann Arbor Mark Hodesh is busy as usual, helping locals select everything they need to break ground on their spring gardens; and that's just the way he likes it. His store, Downtown Home and Garden on South Ashley Street is a historical fixture, open as a retailer since the 1890's. Hodesh's timing was perfect when he bought the place in 1975, and the store enjoyed steady and rapid growth during the first five years. Though he sold the store for a period of time and moved to Maine (where he owned and ran a summer inn with his wife Margaret), he returned to the languishing store in 1997, determined to reinvigorate it.

He did just that, and today Hodesh has twelve full-time employees and describes sales as "off the charts." Vegetable gardening is Downtown Home and Garden's big business these days, thanks to a thriving local food movement that surrounds Ann Arbor. The store has developed a reputation for having the largest selection of seeds around (including heirloom, organic and non-GMO varieties) and carries tough-to-find plant starts like asparagus, currants and a half dozen varieties of garlic. All of this is intentional on Hodesh's part. "I read two to three newspapers each day, watching for trends," he explains. "So if I see that leeks, shallots or a certain type of garlic are of interest in the press, we get them here."

Hodesh takes the same thoughtful approach to the housewares, outdoor furnishings and unique gifts that he carries. "One thing we do is keep brand names out of here. Our job is to filter, not to be a venue for national brands to make their statement; this is our statement." Downtown Home and Garden carries a variety of gourmet cooking equipment, products for canning, pickling and preserving, and is known for their extensive collection of Boleslawiec Polish pottery. "There's never enough of it," says Hodesh. "And we advise people on our web mailing list whenever a new shipment of pottery comes in."

As for marketing, Downtown Home and Garden uses its website as a vehicle to bring customers into the store, notifying them of new products, monthly coupons and offers an artfully crafted and informative newsletter. Hodesh is also considering direct mailing to take the place of the inserts he has done through the Ann Arbor News, which will soon discontinue its print edition. As for the future, Downtown Home and Garden plans to hang onto its prime downtown location, and Hodesh says he will deal with growth by using space more intensely. After thirty-four years, he still enjoys his work and lasting relationships with loyal customers. Says Hodesh: "I am a lucky duck and I know it."

On the city's northeast side, Doug Collier is tending to the growth of young upstarts as well; though not that of spring seedlings. As the administrator at Go Like the Wind Montessori School, Collier is overseeing the educational development of children from ages birth through fifteen years. The school was founded in 1987 by Carl and Terry Young, who sought to implement the Montessori method within a Christian environment.

"We believe that learning comes through the hands," says Collier. "It happens in a concrete environment where the children use materials to learn math, language, reading and writing skills, science and history." The Montessori method was developed in the late 19th and early 20th centuries by Italian educator Maria Montessori, and Go Like the Wind is an affiliate of the American Montessori Society, International Montessori Council, and the Michigan Montessori Society.

Go Like the Wind is unique in that few Montessori schools offer programs across such a wide age range (Birth through Middle School). Most lessons are done in small groups based on ability rather than age, another core principle of the Montessori method. "Because we have the entire age span, children can always work at their abilities," explains Collier. "Just because they've exhausted a curriculum for a particular age or classroom, they don't have to stop. So if a kindergartner exhausts the preprimary (preschool level) classroom, we can bring the lower elementary level down to them. Children never run out of opportunities to do challenging work."

The school offers a peaceful environment on its forty-acre campus located just off of Dixboro Road, and students and faculty alike embrace the school's meadow and woodland areas as outdoor classrooms. Go Like the Wind also values the arts, particularly music. Students choose an instrument beginning in the fourth grade and can join one of several of the school's band or strings programs. The school's diverse cultural representation is also celebrated and integrated into the culture (social studies and history) curriculum.

So how is this private school faring through the steep economic downturn? Collier says that they haven't felt the brunt of the recession during this academic year. "It's going to be going into the fall of next year that we see how the economy really affects enrollments," he predicts. "We have a number of families unsure about their economic future. When that becomes the case, they rethink private schools. We never hear from a family that they're leaving because they don't think the programs are worth it anymore. We hear that they're leaving because they are making huge sacrifices and they are trying every angle they can to keep their kids with us, but they are still struggling due to job loss or salary cuts."

Go Like the Wind relies heavily on word of mouth as a means of marketing, but also allows a budget for print and, more recently, radio advertising. Despite some uncertainties over next year's enrollment, Collier is committed to keeping the school in a ready position. "We want to use this time to look internally, to make sure we have the strongest teachers and the strongest curriculum possible. It is a challenge to be purposeful with each decision we make-to be poised and ready for the end of the recession."

Xoran Technologies in Ann Arbor made its first impressions on the health care community in 2001, when founders Neal Clinthorne and Pedja Sukovic sought to develop innovative imaging technologies that would enable physicians to treat their patients more effectively and efficiently. They began by introducing the i-CAT®, a dental CT scanner that allowed for detailed, 3-D imaging of patients performed at the dental office, later developing low-dose medical CT scanners, including the compact MiniCAT™ and mobile xCAT™. In the last eight years Xoran Technologies has grown from a team of two into a company of over sixty employees; designers, researchers, software developers and sales and marketing staff. Susie Vestevich, manager of public relations and corporate communications, credits their growth to an offering of products that bring advanced imaging directly to the patient, reduce the amount of effective radiation dose delivered to the patient, and deliver high quality images to the health care provider.

For example, Xoran's xCAT® ENT (ear, nose and throat) scanner is mobile, and enables surgeons to image patients inside the operating room, allowing them to see beyond the area being surgically explored. Surgeons can make final corrections, reducing the need for revision surgeries. Vestevich says that sales at Xoran continue to increase despite the economic recession. "In fact, we will be releasing a new product, xCAT® for the Neuro-ICU in June," says Vestevich. "Patients in Neuro-Intensive Care Units must be imaged daily to check for after-surgery brain bleeds and swelling. To be imaged, Neuro-ICU patients must be transported to central imaging, which is extremely costly, and highly dangerous to these patients. The xCAT for the Neuro-ICU will allow critically ill patients to be scanned right there in the ICU."

Xoran works closely with the University of Michigan Health System's medical community, who utilizes their products and tests new technology. By taking advantage of local resources and striving to develop equipment optimized for specific applications, Xoran has a bright future ahead.

Carrie Bristol, a new entrepreneur in the Ann Arbor community, is making her living promoting health and wellness, too. Her exercise classes take clients through intense, heart pumping workouts using an innovative method called Pure Barre, the technique for which her studio is also named. Pure Barre opened at its location on Felch Street last August, but Bristol says that owning her studio was several years in the making.

In 2006, Bristol was completing her Master's Degree in French and teaching at Wayne State University. Unsure as to whether she wanted to pursue teaching as a career, Bristol was turned on to Pure Barre through its creator, Carrie Rezabek. At Rezabek's original studio in Birmingham, Michigan, Bristol says she was "instantly hooked" on the technique-a ballet barre-based workout that uses intense isometric movements to tone muscles and burn fat. "I tried it and I just couldn't believe how effective the exercises were," she says. Bristol trained intensely with Rezabek and became a certified instructor. When Rezabek left Birmingham to open more studios on the west coast, Bristol and her husband Cory knew that their next move was to invest in Pure Barre and open a studio of their own.

Since purchasing the license for their own Pure Barre studio in March 2008, the climate for any entrepreneur has certainly changed a great deal. "But business is good," says Bristol. "In January we noticed a nice jump. We also lowered prices overall and offered better specials for new clients, which has helped bring new people in." Bristol points to the effectiveness of the technique itself as a motivator for clients to stick with program. "They see and feel change quickly, and they come back for more," she says. Pure Barre can now be found in eleven studios across the country.

Bristol's classes have a high attendance among university students, and Bristol is hoping to attract a broader client base in the coming months. As the studio gets off the ground, the Bristol's are pinching pennies where they can. Yet at the same time, they are dedicated to giving back to the community-Pure Barre Ann Arbor participates in local charity events and has organized donation only classes with proceeds going to the Breast Cancer Fund. The Bristol's are working hard, but remain optimistic about the future of their new business. "We have faith that people will still want to invest in their exercise regimens despite economic hard times," says Bristol. "And in the next few years we hope to build our clientele to the point where we can expand, offering a larger facility and even more classes."