Forget about low-carb diets or trendy organic produce. Americans still love their donuts.
Office kitchens just wouldn't be the same without a near-empty box of the glazed breakfast treat. (Etiquette says you never take the last one.)
Pop culture even has its own donut-addicted poster boy, lovable cartoon buffoon Homer Simpson, who at the sight of one often murmurs his signature catchphrase "Mmmm. Donuts."
That pastry worship is why entrepreneurs Danny Klam and cousin Rock Klam started Simply Splendid Donuts and Ice Cream. Opening their first store in 2004, Simply Splendid Donuts' offering of fluffy, chewy treats quickly grew its customer base and attracted a robust business clientèle, taking in $650,000 in 2007 and $750,000 in 2008.
But the Klams' secret to growth isn't just making the perfect donut, the duo has developed a strategy of purchasing existing shops from owners looking to retire and then rebranding them to Simply Splendid. That reduces start-up costs and keeps the company with little or no debt on its books.
The local market, Danny Klam says, is good for acquiring new locations.
"There are a lot of baby boomers at the point of retirement," he says. "We can buy up these stores without taking up more debt." In this economic climate, Klam says, financing is hard to obtain anyway.
"A lot of people (in the industry) are first-generation immigrants and have become burned out on the business," Rock Klam says. "Their kids are educated and going to college and don't want to take on the responsibility of running the shops. They are going to do other things in the corporate, medical or engineering world."
So the cousins acquire the stores at bargain prices, remodel them and rebrand them as Simply Splendid.
Austin Metro Study
1st Quarter Update
April 28th, 2009
Eldon Rude, Director
- INTRO: In broad terms, there are some positive developments nationally, with some improvement in the credit markets and some semblance of a spring housing market. In the long term, most experts include Austin a list of cities with particularly bright futures in terms of corporate and job growth, driven by factors such as low taxes, high quality of life and a strong and diverse workforce.
- The national stats remain sobering: consumer confidence is at its lowest point in years, GDP is down 6% as of 4Q08, and 4.9 million jobs have been lost in the past 12 months. However, all these downward trends are predicted to flatten out in 2009.
- JOBS: In the 4Q08, Texas ranked was the #1 state in the country in terms of job growth. In 1Q09, Texas did not make the list. However, looking at the Top 15 metro market areas tracked by Metro Study as ranked by job growth, 6 of the top 15 market areas were in Texas, with Austin at #10.
- PRICES: Housing prices are holding steady in Central Texas, and are expected to stay flat or decline slightly this year. Compare this to other markets in the US which continue to see 30% - 50% declines in home values.
- MORTGAGE RATES remain historically low, with home buyers experiencing the greatest levels of purchasing power in more than 20 years. Experts agree that rates will not stay this low, and current rates combined with tax credits create historic opportunities for buyers.
- APARTMENT MARKET: Occupancy is at 87% overall, and at less than 80% on the "A" locations. Expect "A" space to fill up this year, at the expense of "B" space. Supply of new units is slowing, and apartment managers report losing some "A" tenants to the homebuyer market.
- MLS DATA: In March of '09, closings were down 23% over the previous year. So far, pendings are down 11% for April (not as low as recent months), and we have a manageable inventory of 6.5 months of supply of resale homes.
- FORECLOSURE listings are up overall, due in part to an increase in "repostings" of some properties, and a spike in foreclosures in particular markets, most notably Manor/Elgin, where 27% of sales are foreclosures.
- NEW HOMES: There are indications that 1Q09 may be the bottom of the market, as closings continue to outpace starts. Currently we have 2.6 months of supply of finished vacant inventory - need to see that number drop to 2 months supply this year. Austin and San Antonio have the lowest months of supply of all metro areas in Texas.
- SUMMARY: Threats in 2009 include unknowns in the banking world, the effects of the swine flu problem on the markets, local job losses, availability of financing, accelerating foreclosures, and low consumer confidence. Boosters this year include spring housing market activity, low interest rates, tax credits, lack of a price bubble in Central Texas, manageable inventories, the possibility that 1Q09 might be the bottom of the market, and continued migration to Texas.
Austin Business Journal
Texas dominates a new list on job growth potential among the nation's largest metropolitan areas.
Austin ranks No. 1 on the list of big cities for employment potential from NewGeography.com. The Capital City posted modest job growth of just 1 percent in 2008-but that was still better than a lot of other big cities. That growth, coupled with Austin's long-term potential to continue creating new jobs, garnered it the top spot.
Texas' major metros round out the top five spots on the big cities list, with Houston coming in 2nd, San Antonio 3rd, Fort Worth-Arlington 4th and Dallas 5th.
The list, based largely on job growth in regions across the nation over the long, middle and short term, has changed over the years, but the reports authors say the employment landscape has never looked like this.
"In past iterations, we saw many fast-growing economies--some adding jobs at annual rates of 3 percent to 5 percent," said research Joel Kotkin. "Meanwhile, some grew more slowly, and others actually lost jobs. This year, however, you can barely find a fast-growing economy anywhere in this vast, diverse country. In 2008, 2 percent growth made a city a veritable boom town."
Consequently, Kotkin said, this year's list might more aptly be called the "least worst." Still, he said, those least worst economies today largely mirror those that topped last year's list, even if those regions have recently experienced less growth than in prior years.
In Austin for instance the 1 percent job growth in 2008 was less than a third of its annual average since 2003.
Looking at the complete list of metro areas-including large, medium and small cities-Texas again does well in the top five. Odessa ranks No. 1 on the overall list, followed by Grand Junction, Colo.; Longview; Houma, La.; and Killeen-Temple.
The National Association of Home Builders (NAHB) estimates that 55 million families, or half of all U.S. households, can afford today's $200,000 median-priced new homes, thanks to record low mortgage rates and declining home prices. That's an increase of 17 million households from two years ago.
Using data from the U.S. Census Bureau, NAHB compared home prices, mortgage rates and minimum income needed to purchase a median-priced home in February 2007 and February 2009. A typical household today can afford to purchase a home with $20,000 less income and still save nearly $500 per month on their housing expenses, including principal, interest, taxes and insurance. NAHB estimates that 55.4 million households can afford to purchase a home today compared with 38.4 million two years ago. Tue, Apr 7, 2009
A new study by CTIA-The Wireless Association in conjunction with Harris Interactive confirms what many real estate agents and brokers already know: wireless technology can help businesses improve productivity and operate more efficiently. A survey of 700 American businesses finds that 45 percent of decision makers feel wireless technology is essential to staying competitive in the marketplace. The companies surveyed said they expect to see a 15 percent improvement in their bottom line within the next 12 months. Specific areas of improvement include communications (23 percent), employee efficiency (18 percent), productivity (14 percent), customer care (14 percent) and reduced costs (11 percent). Mon, Apr 13, 2009
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