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Small Business Responds to War

Whether positive or negative, the impact of the war in Iraq is pronounced in the small-business community.

Opinions expressed by Entrepreneur contributors are their own.

Ordinarily, having a store near San Francisco's Market Street would be a boon for your business, with throngs of tourists and locals passing by as they make their way through downtown. But as war with Iraq became more imminent in February and protestors in all the world's major cities made their way to the streets, the area was anything but prime real estate.

"During the protests, we had to close early for two days, as our employees were fearful for their safety, and there wasn't any business anyway," says Rick Karp, president of Cole Fox Hardware, located on Fourth Street near Market Street, a gathering place for both protestors and police during recent war protests. "Our sales were down by one-third for the period of time that the protests were raging."

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There's no doubt about it: Small businesses across the country are experiencing the direct effects of the war in Iraq, whether in declining sales or the loss of employees in the armed forces. Meanwhile, many are choosing to make the best of the situation, tailoring their products or involving themselves in events, activities and fundraisers in support of the troops.

VIDISolutions, a New York City video communications software provider, is getting into the act by providing its VIDITalk software, a video messaging application, to military troops and their families. The software is installed on a computer along with a webcam, and once installed it can capture, record, encode and compress the video that is then stored on a central server. A hyperlink to the streaming video file is returned to the user and can be placed in e-mails and other electronic documents. The recipient then clicks on the link and can view the video on a Web page.

"The program is designed to provide VIDITalk to organizations that can offer free access to families interested in staying in close touch with their loved ones," says Paul Braun, president of VIDISolutions. So far the company has donated software to the National Military Families Association and the U.S. Marine Corps base in Quantico, Virginia.

At Sofa U Love, a Hollywood, California, chain of custom sofa stores, founder and owner Johnny Karapetian is combining a grand opening celebration with a fundraiser. The weekend of May 17 will mark the opening of the company's Seal Beach location, to be accompanied by a charitable sit-in. For 48 hours, a couple will sit on a couch in the new store's showroom window and accept flat donations and sponsorships for their time on the couch. All funds raised will be donated to Operation USO Care Package, a program supplying U.S. troops with personal hygiene products. "In light of the current situation in the world, it seemed inappropriate and self-serving to host a celebration of any sort without addressing current events," says Karapetian.

In addition to the sit-in, Karapetian also plans to donate portions of sales during the event to Operation USO Care Package and will give store visitors the opportunity to write personal messages that will be transcribed onto official postcards by the USO and delivered to troops overseas.

Likewise,, an online private jet charter exchange, is holding a fundraiser for the benefit of military families. This month, the Quincy, Massachusetts-based company will auction off a weekend trip to Nantucket, including a private flight from New York to the island and accommodations at a resort. Proceeds from the auction will benefit the Air Force Aid Society, the official charity of the U.S. Air Force.

Says Barbara Rudolph, director of communications for, "Hopefully the funds will, in some small way, lend a hand to people in the military who have been pulled away from their jobs and who are experiencing financial burdens because they are overseas."

What's the Current Climate?
Despite the war in Iraq and a faltering economy, business owners remain fairly optimistic about the hopes for a recovery, according to an survey conducted the week of April 7. More than half of the 523 respondents indicated that they had no plans to change their business investment strategy as a result of the war. In addition, 52 percent said their customers had not scaled back on their purchases since the start of the year, and a full 68 percent said they think conditions for their businesses will be better 12 months from now. We may just see a recovery yet. --Karen E. Spaeder

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