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Many new businesses opening...a sign?
AREA — The nation's economic downturn hasn't prevented new local businesses from springing up like weeds, but experts are divided on what that means for the local business economy.
Linda Walbridge, executive director of the Western Maine Economic Development Council (WMEDC), says that she sees signs of new life in the local economy.
"Yes, I do think business is picking up," said Walbridge. As evidence, Walbridge points to the reopening of Saunders Brothers Mill in Locke Mills, and a new dental hygienist who is setting up shop along Route 26 in Oxford.
Dozens of new businesses have opened their doors lately. They're not huge enterprises, but individual proprietors who have taken the plunge into icy economic waters.
Every local town seems to have examples of businesses that have opened in the last six months.
Fryeburg has seen Express Applications, a web-hosting firm, and Fryeburg Family Dental recently set up shop.
Norway and South Paris are awash in new businesses. Norway is home to Bliss Healing Art, Johnny Millionaire, Does, 76 Pleasant Street and Simple Eats.
South Paris has seen Kanine Kare, Edward Jones, and a new location for Pine Tree Children's House, as well as Play On, a video and game rental store.
Other examples include Kezar Realty in Lovell, Bread and More Bakery in Mechanic Falls, Square Root Natural Foods in Poland, Major's Heating service in Hebron, Xanna's Spa in West Paris, and, in Greenwood, the reopening of Saunder's Brothers Mill, under the leadership of Louise Jonaitis.
Susan Feiner, an economics professor of the University of Southern Maine, says that new businesses indicate a perception that the economy is rebounding.
"People do not start businesses intending to lose money," said Feiner. "Maybe the mafia does, but legitimate businesses don't."
And if they're expecting to make money, they must see a viable market to support their enterprise.
"People study the market, and the demographics," said Feiner. "If they're getting loans, they have to show the bank that the potential to make money is there."
One example of a businesswoman who has done her homework is Bernadette Kozak, who recently opened Fryeburg Family Dental.
Kozak was a dental hygienist for nearly 30 years. She was finally prompted to strike out on her own when her research revealed an opportunity to her.
Two years ago, Maine became one of only three states in the nation to clear the way for dental hygienists to become providers.
She identified Fryeburg as a federally-designated area where she could register her practice as a public health site.
She also found that the only existing dentist didn't accept MaineCare.
For Kozak, it was a business opportunity that was ripe for the plucking.
"It just worked out great," she said. "I'm close to 300 patients now."
Kozak says that she sees other new businesses opening, and that she is positive about the future of the local economy.
"There's another new establishment going in next door," said Kozak. "It's really growing."
Then there's the other side of the coin.
While new business openings can indicate economic growth, they can also be an indicator of an economy in decline.
Adam Fisher, a spokesperson for the Maine Department of Labor, says that an entrepreneur might simply be someone who failed to find a job working for a larger firm.
"People are looking at self-employment because there isn't a lot of diversity of other employers," said Fisher.
An economic downturn, says Fisher, can provide different opportunities to a would-be business owner.
"It might cost them a little bit less to rent that storefront," said Fisher. "There may have been business closures in that same sector, and that might have provided a new opportunity for someone with an idea to fill that void. There are all kinds of reasons for people to start a business."
"Even during the recession there were still interested businesses," said Walbridge.
Alexandria Taylor-Kemp is an example of a start-up business that may not have happened in a better economy.
She became a licensed massage therapist two years ago, but couldn't find the right job opening amid record unemployment numbers.
"I couldn't find a job, said Taylor-Kemp, "so I decided to make my own job."
Taylor-Kemp was able to take out a small business loan through Community Concepts to open her business, Xanna's Spa, in West Paris.
She says that the decision has proven to be a good one for her, so far.
It's too early to tell for sure whether the new businesses opening their doors are simply replacing outgoing businesses, or whether they signal the critical mass necessary to grow a local economy.
According to Fisher, the Bridgton-Paris Labor Market Area, or LMA, has seen a decline in employment locations in the area between 2007 and 2009.
In 2000, an average of 810 employers were registered in the LMA. In 2007, just before the recession hit, the number had climbed to 907. The most recent year on record, 2009, showed a decline to 872.
However, Fisher is hopeful that the number is climbing.
"We've seen lots of activity with new employer registrations in the state," he said. "We probably see between 50 and 100 in any given week."
And even though both Kozak and Taylor-Kemp became entrepreneurs for very different reasons, both report that they have had first-hand experience with a multiplier effect.
Kozak sublets a portion of her offices to Standish Denture Center, while Taylor-Kemp rents out a portion of her building at a discounted rate to Amanda Walker, another entrepreneur who founded Positive Choice Photography.
Next Week: Is Oxford County entrepreneur-friendly?