Are Our Favorite UPMI Businesses Teetering On The Edge Of Failure?

[tealracing16]

John - well said. When I lived with my now wife my last year of college at Tech we had it made. I was making 8.50 dollars an hour at Wally and she was working at the Bluffs. No we weren't rich and no we weren't spending 8000 on sledding a year, but we traded that for the lifestyle. There isn't a rat race, there is no my sled is faster than yours. It seems more like "hey lets go riding i don't care if I have to wait at a stop sign for you." After getting laid off from my job in WI I really wanted to move back to the UP. But after having all the nice things that come with the rat race I couldn't afford to anymore. Now me and the misses are trying to get back to how happy we were in the UP with the things we had. We had two nice cars and I had an older sled, but we were happy. Now we have a house, new cars, newer sled, and all kinds of "nice" things, but can't afford to be happy.

Someday we'll return to the UP and enjoy what we have for what it is.

 

[Skidooski]

I have seen quite a few of the smaller mom & pop businesses fold in NW Wisconsin, mine included. The county stores, bars and resturants seem to be the hardest hit. They get sold and someone else trys to make a go of it. A year or two later those same businesses are up for sale again. Business backruptcy is booming, I know, I've been there. According to my Attorny, the backruptcy court in Eau Claire, Wi used to be held one 8 hour day per week, now it's 8 hours per day, five days a week. That certainly says something about the economy. By the way, my Attorny's firm is doing well!

 

[snobuilder]

I have seen quite a few of the smaller mom & pop businesses fold in NW Wisconsin, mine included. The county stores, bars and resturants seem to be the hardest hit. They get sold and someone else trys to make a go of it. A year or two later those same businesses are up for sale again. Business backruptcy is booming, I know, I've been there. According to my Attorny, the backruptcy court in Eau Claire, Wi used to be held one 8 hour day per week, now it's 8 hours per day, five days a week. That certainly says something about the economy. By the way, my Attorny's firm is doing well!

so government jobs are booming too?....LOL

 

[Admin]

snobuilder.

My point was not that the world revolves around the Houghton/Hancock areas or even the entire UP. My point was that despite the talk, it is not all doom and goom in the UP. That there are areas of the UP where things are stable and have been for decades.

As for this site depending on snowmobiling everywhere not just the Keweenaw, you are absolutely right. However, as much as you may want to believe, snowmobiling is not going away. It is shrinking and may continue to do so, but I do not foresee a time when it will not exist or the need for this site will not exist.

I do not live off the income of this site. It is a part of my income, but my income is well diversified in many "irons in the fire". If it were to go away, I would not be happy, but ,y lifestyle would not likely change much- at least in a negative way. I can say I would have a TON more time (upwards of 4-7 hours) to spend enjoying the Keweenaw a day in the winter!

-John

 

[snobuilder]

sorry john I should have couched my post a little better,...it wasn't personnal, just pointing out how one thing failing and wages dropping leads to other failures,...and so on....and as you point out you have other options.....the vast, vast majority don't,...you may be one of the last to feel it but anarchy could occur well before that time and whistlin past the graveyard ain't a solution....LOL

I gotta go pack my bag for a keweenaw overnighter.....see ya!....LOL

 

[anonomoose]

This is a great discussion, and a good read.

Making an observation, I think that most county seats complete with lots of government jobs, combined with more recession type businesses that are non-retail, always seem to weather the ups and downs of recession better. Towns that have universities, and students, cop shops, judgeships, and law businesses are all fairly immune to the biggest swings in the economy.

If your business depends largely in discretionary spending, whether that be lodging, or leisure time entertainment, you will feel this recession with a far greater "ouch".

Add in there some hikes in gasoline costs, and building materials, and the hurt is even greater, if folks have to travel further from metro areas to get to you.

So to some who are not bound to the ups and downs quite as much as say someone who builds stainless steel bowls and who are facing heavy competition from abroad, you won't be "seeing" the hits as hard...yet.

At least not right away, but NO single job is exempt from feeling a long and drawn out downward turn....not banks, stockbrokers, politicians, NOBODY!

Eventually you will feel it too. Maybe not fast, and maybe not so deep, but it is bound to get there.

States are now just beginning to deal with the realities of lack of funding...and would have sooner had the Feds not jumped in to cushion the blow....but as the fed begins to pull back the steady stream of funding that has gotten places like Michigan by without a huge melt down, the full effects will be felt and dealt with. As state funding for Universities will certainly impact both professorships, and student loans, even those so called recession proof jobs will begin to feel the pinch. That will then bring the hurt to yet an un-concerned sector.

It all comes back to the idea that there is ultimately no such thing as a free lunch. While lunches can be free for some of the time, eventually the price will have to go up to reflect that cost which can no longer be absorbed.

Put quite simply, this means loss of jobs...top to bottom; east to west.

The Positive spin on this is that you have to adapt, and evolve, and find new ways to do business. One of the best sources for that is the web. It has revolutionized how we think, buy, do business, and vacation. If you think about it....just how far down the sink hole would we be without it?

So gather up your shoelaces folks....the ride will be bumpy...and only those with sea sick pills should really consider taking the gamble right now. Everyone else should think about a refund, and wait for a better day.

Meanwhile, how about that garden this year?? Maybe you should be thinking about bigger and more diverse....cause dem veggies are gett'n expensive.

 

[olsmann]

All this talk including Johns posts really have me wanting to move to to houghton/hancock area. Wife already wants to, just can figure out how. I would give up the nice sleds and cars to live there anyday. Dont need lots of money just enough to survive (and a little for a couple older sleds)

 

[arctiva]

I have seen quite a few of the smaller mom & pop businesses fold in NW Wisconsin, mine included. The county stores, bars and resturants seem to be the hardest hit. They get sold and someone else trys to make a go of it. A year or two later those same businesses are up for sale again. Business backruptcy is booming, I know, I've been there. According to my Attorny, the backruptcy court in Eau Claire, Wi used to be held one 8 hour day per week, now it's 8 hours per day, five days a week. That certainly says something about the economy. By the way, my Attorny's firm is doing well!

Problem i see here is everytime a bussiness gets listed for sale the price goes up which means less profits for the next owner. I seen this with my old nieghbors house was sold 5 times in 6 years and the 1st owner made out like a bandit because he was there for 25 years but the profit for the next 4 were minimal to the last guy actually loseing money to get out of the house.

I also talk with other contractors some who have closed shop because they couldnt make there payments with the reduced work and income. But the small guy who isnt over stretched while he (me) may not be getting rich are able to just get bye in times like now and hope that the future gets better. Anyone try to borrow money from the bank recentlly to expand there bussiness??? I have with no luck. So how can someone expand and try to better themselves or create some jobs unless they have cash on hand 1st?

 

[Skidooski]

Problem i see here is everytime a bussiness gets listed for sale the price goes up which means less profits for the next owner. I seen this with my old nieghbors house was sold 5 times in 6 years and the 1st owner made out like a bandit because he was there for 25 years but the profit for the next 4 were minimal to the last guy actually loseing money to get out of the house.

I also talk with other contractors some who have closed shop because they couldnt make there payments with the reduced work and income. But the small guy who isnt over stretched while he (me) may not be getting rich are able to just get bye in times like now and hope that the future gets better. Anyone try to borrow money from the bank recentlly to expand there bussiness??? I have with no luck. So how can someone expand and try to better themselves or create some jobs unless they have cash on hand 1st?

Not 100% true. Our store was on the market for over two years, kept lowering the price, finally sold it for $20,000 less than what we initially paid for it. Plus, we stuck about $60,000 into remodeling as the place was quite run down. Lost $80,000. No one wanted to buy because they were all scared of the economy. We had to bail out as we were just getting in deeper and deeper.

When we bought the business, it was booming and all was well. Looked at a number of different ways to swing the business in other avenues. A lot of the locals wanted us to add a breakfast cafe and that was something we thought about when we first bought it as the building had plenty of room for even more expansion than what we already did in the beginning. Of course then you have to invest $20,000-$30,000 in septic system upgrades, plus commercial grade "cooking" equipment, fire supression equipment, etc. Then there are the additional insurance premiums, inspection fees, licenses, etc. etc. It can get very expensive when you try to alter the core business.

 

[sniska]

Well said John! As I had a buddy who works in Hancock tell me this morning: “The UP never booms, so it never busts.” I'd love to get move back up there, drop all the 'rat-race' BS and get back to enjoying life

 

[Skylar]

I usually budget $300-$350 for my 3 day trips to Krupp's, usually once a month in the sled seaon. That really has not changed in the last ten years. But what has changed, is all the other costs associated with it. The biggest being the cost of gas. Instead of eating out for all 3 meals, we now tend to eat at least 2 of those meals at the cabin. That hurts the local economy for sure. But, that is what I have to do to keep coming up to sled.

 

[olsmann]

Imo. Every business i see for sale in the UP usually is priced way way beyond market value for even a larger city let alone the UP. If you dont have the books to back up your huge asking price then its only worth the value of the real estate. So no bank would loan on it so now you are looking for a cash buyer that is willing to take the sellers word that its is profitable. (good luck) Anyone with enought to pay cash isnt always interested in buying them self a job.

Unless you can show a buyer and the buyers banker that the business can be profitable even at your asking price. You might as well not even try to sell it.

And that imho is why businesses seem to always be for sale and sit on the market for years and years. Your business is only worth what you can prove today not when it was profitable 10 years ago. Otherwise price it at only what the real estate is worth.

 

[stealthv]

What I "hear" in this thread is the cost-benefit point on the curve has been crossed and people are changing the equation by either staying closer to home, lowering costs with homemade meals or getting out altogether. That's same thing those businesses are doing by moving jobs and product overseas.

This doom and gloom stuff is depressing to read so here's an upbeat perspective. The economy is indeed turning around and the US companies that survived this latest downturn will do well over the next several years. My employer hired just under 22,000 people in 2010 which is more than we laid off in 2009. The reason? We've got $18.7B in backlog orders. Yes, that's B for billion.

Snowmobiling isn't going away. The gap will widen between the haves and have nots. And related to the snowmobile industry, the flavor and supporting businesses may change and that will be unfortunate for some. Forty years ago there were two hundred snowmobile manufacturers, now there is four.

Remember money is neither made or lost, it simply changes hands.

 

[blkhwkbob]

How can people afford snowmobiling when they can't even afford to keep their homes? It's simple--the money isn't there anymore. Snowmobiling is very expensive, and people (like me) are starting to question if its worth all the expenses to ride for two months out of the year.

 

[indy_500]

How can people afford snowmobiling when they can't even afford to keep their homes? It's simple--the money isn't there anymore. Snowmobiling is very expensive, and people (like me) are starting to question if its worth all the expenses to ride for two months out of the year.

it's worth it

 

[Skidooski]

How can people afford snowmobiling when they can't even afford to keep their homes? It's simple--the money isn't there anymore. Snowmobiling is very expensive, and people (like me) are starting to question if its worth all the expenses to ride for two months out of the year.

The wifes and my sleds are paid for and we can ride from the garage right to the trails. I probably won't buy new sleds again and certainly do not buy all the accessories and stuff like I use to. Of course I work for a different company now then when I was in the cities so my income is less than half. But I live in a beautiful area of Wisconsin, well worth the trade off and I'll keep riding even if it's only one time a year.

 

[Marty P]

This could be part of the problem, I’m not sure, what do you guys think?

http://www.youtube.com/watch?v=Tq1zpHF0J04