Home businesses beating the bear

By Rich Sloan, StartupNation

When you think of businesses soaring through this sour economy, home-based startups may not be the first ones that come to mind. Neither would air-based businesses.

Small businesses become strapped as lending costs soar. The giants of the aviation world are besieged by higher fuel prices and cutbacks on business travel.

Yet one home-based business is flying high in a profitable niche: It's a brokerage that connects well-heeled clients with private-jet operators eager to fly.

Rena Davenport, the founder of Exquisite Air Charter, attacked the slowdown by maximizing advertising dollars and zeroing in on the Web. Sales have grown at the Thousand Oaks, Calif., outfit by more than 60%, and the coming fourth quarter is usually the year's busiest period, she says.

Exquisite Air Charter, the winner of the "worldliest" category in the 2007 StartupNation Home-Based 100 competition, is a case study in what America's home-based businesses are doing to survive in a tough environment.

Hurdles abound, including soaring gas prices, higher food costs, harder-to-get loans and gun-shy customers who stall and sometimes cancel projected purchases. But these businesses are tackling it with savvy use of the Web, extra-mile customer service and other tools at their disposal.

I spoke with Davenport and the leaders of some of our other 2007 Home-Based 100 winners about how they've fought the recession in 2008. Here's what they had to say.

Flight to the Web

Exquisite Air Charter was faced with the reality of volatile fuel prices that would sometimes leave supplemental bills of up to $8,000 above the deal that Davenport had arranged between a client and an aircraft provider. Corporate cutbacks in spending have led some companies to reduce their reliance on private-jet travel. And people who once treated themselves to a private jet for a vacation are instead simply flying first class on commercial airlines.

"It had a significant impact on our business," Davenport says, citing an overall decline in the private-aviation market of 15% this year.

So Davenport turned to the Internet. She credits a good portion of her recent success to optimizing her Web site, a task she started on her own late last year. Buying pay-per-click advertising "didn't generate a penny in return," but her search-engine-optimization efforts paid off big-time.

Davenport has tweaked her site to be among the top five listings on search engines when people type in terms that describe her business. In August alone, the number of month-over-month unique visitors to her site shot up more than 400%, she says.

That has brought her customers, who then get the best customer service she can provide, another key to weathering this downturn.

Green begets green

Sweet Onion Creations, the winner in the 2007 StartupNation Home-Based 100 "greenest" category, makes eco-friendly scale models for architects and developers out of mostly recycled materials. Even as developers and architects get hit by the subprime crash and the woes of commercial real estate, Sweet Onion has found a way to grow.

Husband-and-wife team Jake and Lee Cook leaned on their "greenness" to build revenue even in a down market. Wherever you look, especially in the real-estate industry, companies are touting green initiatives.

The Cooks placed literature around their hometown to promote their business. A simple flier printed on recycled paper with tear-off tabs in a Bozeman, Mont., coffee shop yielded two contracts for a green-minded Palm Springs, Calif., architect who happened to be passing through.

The Cooks also established a partnership with a nonprofit, 1% for the Planet, that led to the formation of a sustainable-design scholarship at the University of Montana. This further entrenched Sweet Onion in the community.

Sweet Onion's owners have also added services without much additional overhead. They formed a Web-design and computer-animation team that they can use as needed, offering architects and developers the option of showing virtual models to clients.

These initiatives helped Sweet Onion grow revenue this year by 550% over 2007.

Continued: Focusing on the core

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