Surviving a Tough Economy in Central Pennsylvania
An inside look into three local business professionals who have beaten the odds
By Nick Laus, Ronald Leitzel & Mark R. McCluskey

Three business professionals in Central Pennsylvania have beaten the odds when it comes to surviving this tough economy. Their focused, positive and hard working attitude helped them through some of the hardest times our country has seen. Let us take a look into how a managing director with East Penn Financial Group, a jewelry store owner and a restaurant owner managed to stay in business and continually thrive in this changing economy. Perhaps if you are a business owner or are pursuing to be one, you can take some of their advice with you into your own line of work.

Mark McCluskey is the managing director with East Penn Financial Group, an office of MetLife based in Camp Hill, PA. He says the company was fortunate to have such a strong brand, which has created what they refer to as a “flight to quality.” What this means is that previously some clients would make financial decisions based solely on competitive pricing or an impressive flyer instead of validating whom they are actually doing business with. “I believe our commitment to strong client relationships is second to none,” McCluskey explains. “There is so much more to providing financial advice than just what is on a balance sheet.”

Ronald Leitzel, owner of Mountz Jewelers in Carlisle, Camp Hill and Harrisburg, PA says the past few years have proved to be challenging for most businesses. They anticipated a slowdown was coming and when planning ahead, they reevaluated how they were doing business. “We prepared for a possible decrease in cash flow by examining expenses and looking for ways to keep revenue coming in,” Leitzel explained. “Our top priority became maintaining the business while keeping our entire staff employed.”

Nick Laus is the owner of Café Fresco, including two locations in Harrisburg, PA. He also owns Level 2, an upscale nightclub. He says what makes his business stand out in a tough economy is consistency in service, and not dropping their quality with the drop in economy. “We’ve always stood out from our competitors by having a higher quality of product, freshness, and clean food (meaning less processed),” Laus said. “We make almost all of our ingredients and sauces in-house and with fresh product. We have our own brand and do something original.”

As the economy worsened, McCluskey, Leitzel and Laus each took their own approach with overcoming the tough times. McCluskey explained that many of their clients took the “wait and see” approach, waiting for the economy to turn before making financial decisions. Many times those delays result in missed opportunities. His company took a proactive approach and reached out to their clients to help them make sense of what was going on, especially as it related to the business they trusted them with. What they found was that there was more uncertainty than fear and something as simple as a phone call was very well received. He said making certain that the company’s  representatives were up to speed with what was happening in the economy and how those events would impact their clients was important. They have had to make decisions, which allowed them to get more out of the infrastructure, which they currently have. “It is a matter of working smarter and ensuring that we get the anticipated return on the significant investment we make in running our firm,” McCluskey said. Leitzel explained that they took a look at their internal strengths and weaknesses and external opportunities and threats. They examined expenses, increased their advertising and community outreach, diversified their product offering, and continued to improve their customer service. “We asked ourselves and our employees: were we being as efficient as possible?” The largest portion of overhead expenses was overtime and to better control this, Leitzel asked employees to reduce their overtime hours, but did not restrict overtime when necessary. The result was that employees became more efficient with the hours spent at work. Leitzel realized the need to keep the company name out in the community through advertising by using personal branding, public relations and community outreach. “We needed to show our customers that Mountz was continuing with business and would weather the recession,” he stated. They introduced new product lines to the region that started at lower prices, attracting an entirely new customer base. Their marketing group created fresh and exciting ideas to speak directly to their customers and shifted focus from promoting the designer brands to focusing on emotion. To support the branding message they became aggressive through increasing their advertising footprint, especially with visual media. “Because we anticipated the trend and introduced a new product mix, in 2008 we managed to increase our customer base, and in 2009, we saw an increase in transactions and over 4,000 new clients into our doors," Leitzel explained. Laus said over two years ago they saw everyone jump on the bandwagon with raising their prices. It started with surcharges for gas, then paper and plastic, and then finally food cost was raised due to the increasing price of feed. “So many others have lowered the quality of product because of those rising prices; which we refused to do,” he said. In turn, they are seeing  growth but are less profitable. He believes in consistency in maintaining their already high standards.
 
Keeping a positive outlook on business was something all three professionals did in order to survive. “We have been consistent with sales volume and have not seen a major dip in our sales. Our business has been steady during these tough times. We are very fortunate,” Laus said. McCluskey explained that now, more than ever, is the time for positive reinforcement and encouragement. “I am proud of how our entire team has remained focused on our commitment of putting our customers first,” he said. “I find myself having to remind many of my associates that they are not alone and that if they can succeed during this economy they will be much better positioned for a long, prosperous career for many years to come.” Although employees’ overtime hours were reduced, Leitzel saw the need to keep employee morale high. During the uncertain economic climate, they strived to keep employees motivated and assured them that they would have their job in the next month. Leitzel along with the management team remained optimistic and let employees know that Mountz would survive the crisis. “We kept employees engaged in the business, rather than focused on job security,” he said. “We continued to foster individual learning with education courses, quarterly seminars and opportunities to attend national trade shows. We rewarded employees with company-wide bonuses and maintained our annual Mountz Party.” Because the employees worked as a team to keep expenses down, no employee was laid off from the company. In fact, since 2008, they have increased their full-time and part-time employees by 10 individuals.

Networking seemed to be a major function in the success of these professionals. Each expressed what a beneficial role it played in their exposure into the community. McCluskey stated that networking continued to be an extremely important part of his weekly schedule. “People do business with people who they “Know, like and trust” and what better way to establish relationships than by face-to-face interaction,” he explained. Coupled with their new advertising campaign, Mountz increased their charitable exposure and participation in networking efforts. “We continued with our community outreach by staying involved in charity related fashion shows, out of store expos and bridal shows,” he said. “We continued to give back to the community that had supported us for the past 30 years, and maintained our charitable contributions.” He also went on to say they focused their philanthropic efforts towards health care and quality of life non-profit organizations. Laus explained that Café Fresco’s survival is due to having a great cliental. “Our cliental is our networking and our belief,” he expressed. “Word of mouth is the biggest form of advertisement and we are alive and well because of this.”

Being located in Central Pennsylvania proved to work in all of their favor. McCluskey believes that Central Pennsylvania is much better positioned than many other areas of the country to survive such trying times. “Having worked and lived in other markets, my experience has been that Central Pennsylvania has a responsible, conservative approach to many of the fiscal issues, which caused such detriment in other regions,” he explained. Leitzel believed since the majority of their inventory is considered “designer brands” they had something different to offer in the Central Pennsylvania market. This proved to be one of their internal strengths on which they capitalized. “We increased our number of in store events, offering customers increased selection and an experience that they couldn’t otherwise get locally,” Leitzel said. He recognizes that the dedicated business professionals who reside in the region of Central Pennsylvania has remained relatively stable compared to other parts of the country. Laus believed that by being in Central Pennsylvania, he and his company were fortunate that they were not affected by the economy as much as other parts of the state were. “We are very fortunate and would not want to be anywhere else because of our cliental," he expressed.

As the three business professionals move forward, they continue to stay positive and work diligently to keep their name and business in the public. “The industry is always changing, so we are always observing to adapt to said changes,” Laus said. “I work seven days, 80 hours a week because of my passion, because I know nothing  different," he said. "The only way to think is keeping a positive outlook."

McCluskey believes that the decisions being made by the various regulatory agencies which impact our industry will have a positive affect on the economy while, at the same time, ensuring that many of the events which triggered this economic climate may be avoided in the future. “I am optimistic about the future because there has been such an increased awareness about the impact of the financial decisions we make,” he said. “Now, more than ever, there is a need for “trusted advice” and our firm is positioned to be the destination of choice for those who need assistance achieving their financial goals.” 

Leitzel continues to focus on customer service. “We had to keep our customer base satisfied, and encouraged employees to be optimistic with their clients,” he said. “This proved to be successful, as we maintained and grew our customer base.” Although they continue to face challenges, Leitzel said they are weathering the recession exceptionally well. During the past two years, they were able to streamline efficiency, increase their customer base and maintain their current customers. Looking ahead, they see continued growth and are on track to make 2010 their biggest year to date.

“Stick to the basics - 101 of what businesses grow on: Consistency, Quality, Service, and Integrity - and nothing is   
 easy. Every day is a risk. Being in business is always a risk. Nothing is guaranteed.” – Nick Laus

“The best advice I can give is to focus your energy on your business and have passion about what you do. Anticipate a shift in trends or an economic turnaround even in good times, so that you can be best prepared for continued change.” –Ronald Leitzel

“Stay the course and don’t be hesitant to make unpopular decisions, assuming they are the right ones. Review your mission and vision statements and commit your energy and resources to being the best in your particular field.”
–Mark R. McCluskey

About the Authors:

Mark R. McCluskey is the Managing Director with East Penn Financial Group, an office of MetLife based in Camp Hill. He has over 20 years experience in the financial services industry and active in many civic and business organizations.

Ronald Leitzel is President and CEO of Mountz Jewelers, a family owned retail jeweler with three locations in Central Pennsylvania. He became interested in the jewelry industry after working at his father’s jewelry store, and later attended Bowman Technical School for watch making in Lancaster. He currently serves on various boards and committees within the community. He can be reached at 717.763.1199 or info@mountzjewelers.com.
 
Nick Laus is the owner of Café Fresco; one in Center City Harrisburg and one on Paxton Street in
Harrisburg. He also owns Level 2, an upscale nightclub in Harrisburg. He started learning about the restaurant industry  when he was 11 years old at his family's pizza shop. Here he gained experience and knowledge of the process and what it takes to open and operate a restaurant.