'In a small business, there are no days off.'
Name: Drex Davis
Location: Mesa, Ariz.
What’s the history of your business?
Scrapbook.com formally launched as an online store in 2001 during the downward spiral of the first Internet craze. Jill Davis, my mother, had raised her children and decided to spend her newfound free time taking her hobby to others. Launching a business during the dot-com bust had its challenges, but paradoxically, it was a great time to start an online business because not many new competitors started up during that time. Over the next few years, each of Jill’s children helped out with the business. Currently, my brother and I oversee its operations.
What’s the best part of running a small business?
The camaraderie that forms. In large businesses, sometimes your co-workers are strangers. That’s not the case in a small business.
What have you learned from this experience?
In a small business, there are no days off. You can’t coast. Competition is fierce and it’s often—if not always—coming from bigger and more well-funded competitors. But I’ve learned that what small business sometimes lacks in resources, it makes up for in willpower and ingenuity. That’s why it’s the backbone of the economy and why recessions don’t end until small businesses lead the recovery.
What makes Arizona a good place to do business?
First, our state is growing. There are always more customers moving into our state. We sell our products on the Internet, so we are selling to customers outside of Arizona as well, but scrapbooking has a stronghold in Arizona (and northward throughout the Intermountain West), but our business in Arizona is stronger. Our tax rates are relatively low. And our weather—outside of summer—is great, so most business activity hums along year round. Winters are particularly great. You don’t have to shovel sunshine!
What about Arizona isn’t good for small business?
Our economy is tied closely to real estate, and this presents risks to small business. When real estate isn’t doing well or takes a downturn, the banks that have lent to real estate interests really tighten the purse on all their other business clients. It can be tough to get loans for working capital, for example. During the 2007-2008 downturn, a bank called our line of credit, not because we weren’t a good client (we were) or because we weren’t in good standing (we were), but because their real estate loans had gone south and they were calling in as much capital as they could to try and stay solvent. When banks are in this situation, it’s very tough to finance growth through bank debt.
Also, with an economy very dependent on the health of a single sector, if that sector isn’t doing well, a lot of individual consumers personally aren’t doing well and don’t have the same spending power as they do when the sector is doing well. So that’s a risk to every small business here—our dependence on real estate and what happens to the economy and to banks when that sector struggles.
What’s the biggest benefit of belonging to NFIB?
First, the ability to stay informed about the issues that affect your business and, second, the ability to know you are supporting an institution dedicated to making sure your interests are represented. Small business can’t hire their own lobbyist like a Wal-Mart can. More often than not, that Wal-Mart lobbyist is looking for handouts from the state or municipalities—backed by your tax dollars—to compete unfairly with the small business down the street.
There is a lot of crony capitalism that goes on between big business and big government. I think of NFIB as the anti-crony-capitalist; it plays David to the big business and big government’s Goliath. It’s a watchdog that does its best to make sure that big business interests don’t get sweetheart deals that allow it to put us out of business as well as pushing back against prosperity-killing overregulation by government.
Any advice for other small business owners?
Get involved with NFIB. When you see something happening that is wrong, like some crazy subsidy being handed out to some favored big business, some heavy-handed regulation, tax or fee that will cream your business, call NFIB and make visits with them to lawmakers to explain how these things hurt our state and our businesses here. You may be surprised at how much influence you have.