In honor of Small Business Week, Inc. reporters deployed to several cities where they spent one day talking to owners and entrepreneurs in a particular sector about their challenges.

Lowell, Massachusetts, is an old factory city 30 miles north of Boston, on the banks of the Merrimack River. Waterpower brought the textile mills here in the early 19th century, and the mills brought the mill girls, who migrated by the thousands from the surrounding countryside, endured brutal working conditions, and helped launch America's industrial revolution.

The mills are gone now, but the mill buildings remain. Redbrick memorials to a bygone age, repurposed as museums, loft apartments, studios, offices, restaurants, and shops. One wonders what the mill girls and factory owners would make of Lowell today, with its thriving art and music scene, two college campuses, national historic park, minor league baseball team (the Spinners, naturally), and vibrant downtown business district.

At least one thing about Lowell has not changed over the past two centuries--its appeal to immigrants. The original mill girls were Yankees, but they were quickly overwhelmed by new arrivals from Ireland and French-speaking Canada. Since then, Lowell has absorbed large influxes of Greeks, Brazilians, Colombians, Dominicans, Iraqis, Syrians, North Africans, West Africans, and Southeast Asians (mainly Cambodians), who today make up roughly one-third of the city's population of 110,000. City Hall hosts flag-raising ceremonies to welcome newcomers--one way of recognizing just how important immigrants are to the local economy as consumers, employees, and small-business owners.

Lowell is not a perfect microcosm for the country as a whole. That's a lot to hang on one small city in New England. But its origins in the transition from a rural economy to manufacturing, its rich ethnic diversity, and the way it's navigated shifting currents in the global economy make Lowell broadly relevant. Among its representative challenges: the survival of Main Street retailers threatened by big-box stores and e-commerce.

The news for small retailers like those in Lowell is not all glum. According to a recent survey by internet service provider Cox Business, an "overwhelming majority" of American consumers say they visit a local business at least once a week. Only 8 percent say they do not. Among the attractions: the opportunity to show local support (67 percent), convenience (63 percent), and better customer service (50 percent). Lowell improves its merchants' odds of success with policies designed to attract tourists, make immigrants feel welcome, and support local businesses with loan programs and tax incentives.

Main Street retailers everywhere operate on thin margins, contend with burdensome regulations, and can feel powerless against bigger companies with the resources to protect their own interests. On a recent visit to Lowell's merchants, I found those worries on display--but underlying all was optimism. On Main Street, anyway, the future still looks bright.

The things you can't control


Everyone I spoke to was closely tracking developments in Washington. Many expressed grave concern about the path the country has chosen, as one would expect in a city that voted nearly 70 percent for Hillary Clinton. Former social worker Lydia Blanchard, proprietor since 2009 of Sweet Lydia's candy store on Merrimack Street, spoke for many when she said that a pall settled over Lowell after the election. People stayed home; the streets were quiet. "We tried to say, 'Hey, make yourself feel better with chocolate,'" Blanchard says, smiling. "Everyone was kind of in a coma."

Finbarr Sheehan came to Lowell from Ireland to attend UMass Lowell, worked after college as a bartender, and in 2001 opened with a partner the Old Court Irish Pub around the corner from Sweet Lydia's. "I'm not going to lie to you," Sheehan says, in his thick Irish brogue, "it's crazy times. I'm absolutely appalled by what's going on."

Sheehan is specifically worried about Republican plans to reform the tax code in ways that he believes will explode the deficit and harm the economy. "Nobody wants to pay taxes," he says. "Especially our president. But you know, you need infrastructure, you need roads, you need health care, you need education. It's not that complicated. And you can't just keep cutting taxes. Especially for the rich. You might get a temporary fix for the next couple of years, and then it's going to be that much harder to fix three or four years down the road."

But ask Sheehan about the biggest challenges his business has faced and his answers have nothing to do with Washington. Instead he mentions first the body blow the whole country suffered after 9/11, shortly after he opened. Customers stayed home; the local economy tanked. "I wouldn't go through that again for anything," he says. Were it not for a startup loan from the city that didn't require him to make payments during his first year in operation, he might have gone under.

And the second challenge? The record New England snowfall two winters ago. That nearly buried him. Literally. "It was insane," he says. "So many businesses closed. You lose so much revenue, you can't ever replace it."

It's cyclical

 inline image

Teddy Panos is the second-generation proprietor with his sister, Thea, of the Athenian Corner restaurant, founded in the 1970s by Greek immigrants. Panos can point to two golden eras in the restaurant's history. The first came during the tech boom of the 1980s, when the late Wang Laboratories filled three mid-rise towers on the edge of downtown.

"Corporate credit cards are a wonderful thing," Panos says wistfully. "We were living the dream. You'd unlock the door and the money would pour in." It was during that time that Panos's father, Steve, who still comes every day to the "office" (a corner table in the back of the restaurant), took his first Florida vacation. Eventually he bought two properties in Clearwater. The "Wang condos," he called them.

A decade later, just as Wang was dying, came the next upswing, known in Lowell as the "mills to martinis" era. The Lowell National Historical Park opened, tourists and artists flocked to the city, and a new generation of urban dwellers discovered the pleasures of loft living. "Who the hell's going to pay $400,000 for a downtown condo in Lowell?" Panos remembers wondering.

Mills to martinis wasn't quite like the tech boom, but it kept Panos around long enough to catch the next wave. "We're a lot more optimistic today than we've been in a couple of decades," he says. Downtown is bustling: The commercial vacancy rate is less than 5 percent. The local unemployment rate is 4.2 percent, the same as Massachusetts as a whole. And those downtown condos? Panos lives in one now, having recently returned from the suburb where he lived for years to the neighborhood where he grew up.

Later Panos takes me outside in the rain to show me the parking lot--future site of a $6.5 million restaurant expansion and boutique hotel, made possible in part through a public-private partnership with the city of Lowell. Each floor of the hotel will have its own decor tied to a particular Lowell neighborhood and the people who live there. "We're fairly confident it's going to be a smash success," Panos says. "We're not doing it to lose money, let me put it to you that way."

What politicians don't understand

"Whenever I vote," as a banker friend once told Panos, "I like to vote for someone who's had to meet a payroll on Friday." Panos could not agree more. Take the employer mandate under Obamacare, he says, where businesses with 50 or more employees have to provide health insurance. "We're not anywhere near that, at five or six full time and as many part time. But if I were a businessperson with 50 or 51 employees? The simple solution is to get to 48," he says. "If more people were in government who had to meet a payroll on Friday, they may not be able to do something different. But they would at least know how businesspeople are going to react."


Around the corner at Brew'd Awakening, owner Andy Jacobson is more resigned. "I'm going to have to live with whatever comes down the pipeline," he says, during a brief break at the height of the midday rush. He does have one pet peeve, though: the Massachusetts Earned Sick Time Law, which took effect July 1, 2015. Massachusetts businesses with at least 11 employees, full time or part time, must offer paid sick leave. "I have to pay sick time to college kids, high-school kids, for being out," Jacobson says. "They can be hung over, they can be calling in because they have to study for an exam, and I can't do anything about it. I have to pay them." That requirement, plus recent laddered bumps in the Commonwealth's minimum wage, from $8 an hour in 2014 to $11 on January 1, 2017, has increased his total labor costs about 40 percent. He says he's had to raise prices to preserve his net.

The melting pot

Emanuel Boutique occupies a tiny, single-aisle storefront on Merrimack Street. Owner Yodelqui Lozano was born in the Dominican Republic. Like Sheehan at the Old Court, she worked as an employee in her chosen field, launching Emanuel with a credit card and a loan from her dad. Her only "employee" is a friend who stops by most days and makes herself useful in exchange for a discount on merchandise.

 inline image

Lozano operates on a very thin margin. When her cash register broke recently, she turned to a city loan program for help buying a new one. Her best customers are women much like herself--recent immigrants who appreciate the one-of-a-kind items she brings back from buying trips to Los Angeles ("They don't have to worry about seeing the same dress on someone else") and her low prices. But ever since the election, she feels vulnerable.

Two things, in particular, worry her. The first is Trump's threat to impose a border adjustment tax, which she says might make popular items like the waist trimmers she imports from Colombia too expensive for her clientele. It's a classic example of a place where retail's interests diverge from those of U.S. manufacturers. The second, and more concerning, is the rising fear and uncertainty among Lowell's immigrant community, even for those, like Lozano, whose papers are in order. "When people don't know what's going to happen next," says Lozano, "they save their money."

Maria da Silva Dickinson, economic development officer for the city of Lowell, understands Lozano's concern. She's been here long enough to remember when a booming economy in Brazil, together with the impact of the Great Recession in Lowell, led many Brazilian immigrants to give up on their American dreams and go back home. Some neighborhoods took years to recover.

It's different now, of course. If there's another exodus, it won't be because Brazilians or some other group of immigrants aren't doing well in Lowell, Dickinson says, but rather "because of the uncertainty. They just worry that they're going to get caught. I'm thinking that could affect certain neighborhoods in this city, especially Main Street businesses."

Even so, the entrepreneurs I spoke to were far from despair. Brew'd Awakening's Jacobson, for instance. He may grumble when asked about regulations. But he doesn't for a minute regret his decision to leave his corporate job at Putnam Investments 12 years ago. "I think things are good," he says. "You're going to take your bumps now and then. But as long as you see the general trend going in the right direction, and you're proactive.... " He's sorry he can't talk longer. The place is packed, and he has to get back to work.