Virginia's small businesses may suggest an upward trend for the commonwealth's economy, according to a new study.
The Tayloe Murphy Center at the University of Virginia works with small businesses in small cities and towns, Main Street businesses in towns like Danville, Martinsville, Petersburg and Wise.
The program has tracked 147 of these businesses and finds them doing quite well, according to Professor Greg Fairchild, who heads the program.
"We don't mean double-digit rates of growth on the profitability of these firms," Fairchild says. "We mean high double digit growth rates, so 70% and above for our top-drawer firms."
There are several reasons for their success. For one thing, most of them have low rates of debt, he says. Second: they've diversified.
"They had a number of different products that they offered to the communities in which they operated," Fairchild says. "And then those communities were places where people knew them, they valued them, and then when things began to get tight, they thought of them and continued to do business and patronize their firms."
These companies produce a wide range of products and services. There’s a winery in Wise, a trout fishing farm built around abandoned mines, a place that makes dirigible balloons, a gourmet peanut plant, and a specialty grocery store.
In Northern Virginia, Fairchild has seen tremendous success from Todos supermarkets, which cater to Hispanics and other immigrant populations.
"And it is doing quite well in an industry that typically has very low margins," Fairchild says. "Not only serving the immigrant and Latino population, but providing a wealth of services beyond what a typical grocer may offer."
In addition to showing strong profits, these companies had often added jobs and increased productivity. While the sample studied by the Tayloe Murphy Center was not randomly selected, Fairchild says they tell a surprising story and speak to the potential for prosperity even in hard economic times.
Correction: The original version of this story misidentified the executive director of the Tayloe Murphy Center. The center's director is Greg Fairchild.