Optimistic Small Businesses Brave Uncertain Economy Confidence among American small business owners has never been so low for so long, an industry study says. But some entrepreneurs in Arizona are risking their savings, determined to beat the odds.
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Optimistic Small Businesses Brave Uncertain Economy

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Optimistic Small Businesses Brave Uncertain Economy

Optimistic Small Businesses Brave Uncertain Economy

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STEVE INSKEEP, Host:

Peter O'Dowd of member station KJZZ in Phoenix profiles a few hardy entrepreneurs.

PETER O: All through the recession, this strip mall in Central Phoenix collected cobwebs. And except for a nail salon and two restaurants, it stood almost entirely empty. Then, this summer, things were looking up. A gym took over as the anchor tenant, but then promptly shut down a month later.

CLAUDINE DIMITRIOU: That day I had a heart attack.

(SOUNDBITE OF LAUGHTER)

DIMITRIOU: That was when I said, oh, my God. That's not positive.

DOWD: Claudine Dimitriou had staked her own expanding business on the gym's success. Despite the economy, she's opening her second tanning salon, called The Beach, literally right next door. Her business model revolved around collecting the gym's body-conscience clientele. Dimitriou and the construction crew are forging ahead, anyway.

(SOUNDBITE OF CONSTRUCTION)

DOWD: Dimitriou is picking the salon's color scheme with a paint consultant named Merrilou Peek.

MERRILOU PEEK: You know, for a while everything I saw was closing and closing. And there weren't many people that were actually looking forward to, you know, opening up new businesses. So now that's kind of changing - slowly, but it is changing.

DOWD: Opening day at The Beach is October 1st. The good news: another gym is scheduled to move in to replace the failed one. Less comforting, though, is the fact that Dimitriou staked everything on this business - $80,000 for tanning beds, computers and furniture.

DIMITRIOU: I've taken probably my last bit of what I call my, you know, my safety net and putting it all into this.

DOWD: Why take such a risk with the country's unemployment rate near 10 percent, and the economy growing slower than expected? Dimitriou says her existing salon is doing well enough to expand. And as a business owner with 17 years of experience, she says she thrives in difficult situations.

DIMITRIOU: I'm a very gut-check kind of person. So if I feel it, I do it.

DOWD: The foundation's Dane Stangler cites Department of Labor statistics that show a slight uptick at the end of last year in the number of newly formed American businesses.

DANE STANGLER: Whether you see them as an optimist or wildly deluded, a lot of those business will be the ones that sort of forge our economic future or sort of build the recovery out of this recession.

DOWD: William Dunkelberg is an economist with the National Federation of Independent Business. His group published a study in August, which tracks the confidence of existing small businesses. The index has never been so low for so long.

WILLIAM DUNKELBERG: They're pretty pessimistic about the way things look, and they're not about to spend their capital on hiring or on expansion until they're more certain about what the future looks like.

DOWD: But don't talk about pessimism with Valarie Shaw and her business partner Holly Hunt.

HOLLY HUNT: Unidentified Man: Oh, that smells wonderful.

HUNT: Unidentified Man: It smells like coco.

DOWD: The women are among the new business owners in Arizona that have risked their livelihoods despite the economy.

(SOUNDBITE OF SCANNER AND BAG RUSTLING)

DOWD: Hunt says she raided her entire 401(k) to open this small tea shop in the same complex as the tanning salon. Her family and friends doubted the decision. Shaw took out a second mortgage on her home, and Fleur de Teas opened August 4th.

VALARIE SHAW: You know, I think people need to have a little courage, because if everybody goes around moaning about the economy, it sort of becomes a self-fulfilling prophecy.

DOWD: For NPR News, I'm Peter O'Dowd, in Phoenix.

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