There's no one sure way to weather the current economic crisis, a variety of strategy will be required, but all is definitely not lost, either, a panel of experts told Durango-area business people Thursday.
"Obama's plan will work eventually," said David Broyles, president of First Southwest Bank. "But it's going to take time."
Melanie McLean of Fredrick-Zink & Associates seemed to agree. The only quick relief for individuals will be a few more bucks in the paycheck from a reduction in withholding tax, McLean said. Breaks for and business investors will come along when details of the plans are better known.
Meanwhile, the 20 odd personal tax credits and exemptions will apply to businesses that are sole proprietors, partners and limited liability companies. Entrepreneurs were told they can analyze their business plan with an eye to cutting fat and tightening slack, and how to turn over every stone in search of funding, build partnerships if possible and to stay in touch with their accountant, tax adviser and attorney.
A comment by Broyles pointed to a reason for the dire economy. He said that in researching past economic recessions as well as the Great Depression of 1929, he found they had four factors in common: easy credit, speculation, greed and fraud.
In addition to Broyles and McLean, the panel included Kathrine McClenny, First Southwest's senior vice president; Jack Llewellyn, president of the Durango Chamber of Commerce; Gail Aalund of Wachovia Securities; and Cheryl Zeman of Rabouin Zeman Law Group. The chamber, the law group and First Southwest hosted the briefing.
Michelle Rabouin, a principal in the law group, was the moderator. She led a question-and-answer period at the end of the two-hour presentation at the Durango Public Library.
"Small and medium-sized businesses will lead the way out of the recession," Rabouin said. "They will build the jobs that provide the money to get back to financial feasibility."
Panel members covered a range of topics:•A first line of help should be the local Region 9 Economic Development District of Southwest Colorado and the Small Business Administration. The SBA now can guarantee 90 percent of loans, up from 75 percent.
- Initial public offerings basically are dead, but there still is life in private investments where risk can be spread.
- Strategic partnerships can reduce cost through pooling efforts. The Nature's Oasis/Wine Merchant/Sunnyside Farms Market trio was cited as an example. Those three stores, once in separate locations, now share space in a new building at 300 South Camino del Rio.
- Buy local to keep money circulating. Every dollar that escapes over the Internet or goes to New Mexico is a dollar lost in Durango's economy.
- The U.S. Securities and Exchange Commission is easing requirements on small businesses that register securities.
- Although it's not good news for those who need spending to survive, the public savings rate has reached 5 percent.
- Emergency spending should come from a dedicated fund, not from retirement savings.
- Look for a bargain, because suppliers may be ready to deal because of the economy. Also, buy inventory in preparation for an upturn in the economy.
daler@durangoherald.com