Small Business Responds to War

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

By Devlin Smith

Opinions expressed by Entrepreneur contributors are their own.

Ordinarily, having a store near San Francisco's MarketStreet would be a boon for your business, with throngs of touristsand locals passing by as they make their way through downtown. Butas war with Iraq became more imminent in February and protestors inall the world's major cities made their way to the streets, thearea 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 therewasn't any business anyway," says Rick Karp, president ofCole FoxHardware, located on Fourth Street near Market Street, agathering place for both protestors and police during recent warprotests. "Our sales were down by one-third for the period oftime that the protests were raging."

Small businesses also stand to benefit from therebuilding of Iraq. Click here to find out how you cango about getting a contract.

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

VIDISolutions, a New York City video communicationssoftware provider, is getting into the act by providing itsVIDITalk software, a video messaging application, to militarytroops and their families. The software is installed on a computeralong with a webcam, and once installed it can capture, record,encode and compress the video that is then stored on a centralserver. A hyperlink to the streaming video file is returned to theuser and can be placed in e-mails and other electronic documents.The recipient then clicks on the link and can view the video on aWeb page.

"The program is designed to provide VIDITalk toorganizations that can offer free access to families interested instaying in close touch with their loved ones," says PaulBraun, president of VIDISolutions. So far the company has donatedsoftware 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 sofastores, founder and owner Johnny Karapetian is combining a grandopening celebration with a fundraiser. The weekend of May 17 willmark the opening of the company's Seal Beach location, to beaccompanied by a charitable sit-in. For 48 hours, a couple will siton a couch in the new store's showroom window and accept flatdonations and sponsorships for their time on the couch. All fundsraised will be donated to Operation USO Care Package, a programsupplying U.S. troops with personal hygiene products. "Inlight of the current situation in the world, it seemedinappropriate and self-serving to host a celebration of any sortwithout addressing current events," says Karapetian.

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

Likewise,, an online private jet charterexchange, is holding a fundraiser for the benefit of militaryfamilies. This month, the Quincy, Massachusetts-based company willauction off a weekend trip to Nantucket, including a private flightfrom 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, "Hopefully the funds will, in some smallway, lend a hand to people in the military who have been pulledaway from their jobs and who are experiencing financial burdensbecause they are overseas."

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

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