Small businesses weather recession by staying small: real estate-related businesses feel industrywide slump.

Small businesses weather recession by staying small

Asian small businesses are weathering the storm better than the general Los Angeles economy, but signs of a slowdown abound especially among real estate- and construction-related companies.

"Southland Asian small businesses will hold steady and not go crazy because of the war and the recession like the stock market," said Tony Wong, former president of the Asian Business Association and president of Los Angeles-based Kawes & Associates, a civil engineering consulting firm.

Wong explained that Asian small business people, who primarily own retail establishments, service firms and import/export companies should "handle the recession better than large firms because they have less red tape to go through to cut their expenses."

But William J. Yang, president of the 120-member California Chinese-American Association of Construction Professionals, said that the recession has "affected work on private homes, office buildings and shopping centers quite a bit."

But Yang, an engineering consultant in Burbank, said that work for the public sector is still "holding pretty good because of work for transportation, school and prison projects."

Real estate-related firms have also been hit hard by the recession. At the Asian Business League, a spokesperson said "our membership is mainly in corporate positions, but many of our members in the real estate industry have reported a large reduction in their business." The organization has 400 members in Southern California.

However, there is good news for the import/export-related industries, said Wong, because the "Pacific Rim countries, especially Taiwan, Singapore and Hong Kong, are still investing quite a bit of capital in the United States."

Yumi Jhang-Park, executive director of the Korean-American Grocers Association, agreed. "Sales have dropped slightly, but in the long run the recession won't affect us too much because people tend to stay home rather than eat in restaurants during a recession," he said.

Jhang-Park said that grocery and liquor store ownership is the largest industry for Korean Americans, who own 3,000 grocery and liquor stores in Southern California.

A Korean pharmacy owner, Jung Yun Kim, expressed a similar optimism. "I think that people still need to buy medicine in a recession and I think it won't affect my business," he said.

Banks in Koreatown report that they are still receiving many requests for business loans from Korean small business owners. Rick Escarcega, vice president and senior loan officer at Seoul Bank of California in Koreatown, said that he has not seen a slowdown in requests for small business loans at his bank.

On the contrary, Escarcega said, "I don't see a downturn, I see an upturn because many of my clients are borrowing money to open liquor shops in new areas such as Huntington Park and Lincoln Heights."

Escarcega also observed that many Korean merchants are also borrowing money to purchase the buildings that house their stores.

But other business and community leaders were not as enthusiastic.

"We have seen a significant slowdown in the past two months at Chinatown restaurants, gift shops and herbal tea shops," said a Chinatown Chamber of Commerce spokesperson.

Jeff Kim, manager of Ace Motors Inc. at 2727 W. Pico Blvd., said his automobile brokerage's sales have declined 30 percent in the past two months. "I have talked with the auto brokers and dealers in Koreatown and they all report a slowdown," said Kim. "I have been in the business for six years and this is the worst it has ever been. I hope it improves soon."

Korean garment contractors are also experiencing a slowdown, according to John Choi, executive director of the Korean-American Garment Contractor Association.

"Right now all our sewing contractors are suffering from a recession," said Choi, because they are receiving fewer contracts from manufacturers who are getting fewer orders from retailers.

Roger Miller, regional manager of the enforcement division of the state Department of Industrial Relations, also said that his department has received complaints from sewing machine operators who claimed that their contractors have closed their doors without issuing a final paycheck.

PHOTO : Apparel: Contract shops get fewer orders