Small Businesses Can Work!
Week of October 20, 2003

When Buckland's Frederica and Tim Gavin opened the door to C&S Variety Store on August 18th of this year, they weren't quite sure what to expect.

They had reduced the size of their bedroom by one half in order to make space for their small store, taking advantage of the fact there was already a door for access in place. Without the benefit of any cash to buy their start up inventory, they utilized our Borough's revolving small business loan fund to purchase their first shipment of goods for resale.

The Borough's unique loan program for businesses is based on allowing our residents to utilize a portion of their permanent fund dividend in advance of the October payment date, as long as the loan is used for developing or improving a business. There is no interest on these loans, which are made from February through August of each year. Nearly 200 such loans have been provided over the last three years.

Individual loans were limited to just $800 this year, based on the lowered projection for the dividend. The Gavins utilized the borrowing power of Frederica and her 18-year-old daughter Cheryl to start their businesses with just $1,600 in capital.

Their first order, from Span-Alaska, was comprised of items that they felt confident local people would buy - snack foods and cases of soft drinks. They posted signs around town to announce the opening.

How has the store done thus far? In the month of September alone, the Gavins had sales of $13,759.84, resulting in a profit of over $5,000.

You might be wondering how a $1,600 investment could turn into that size a business almost overnight. The answer is reinvestment. Instead of taking any of the proceeds of their business as income, they utilized all the revenue to buy more inventory. Their orders from Span-Alaska just got larger and larger.

As the weeks went by, the Gavins also added new items to their inventory. Donuts purchased from Kotzebue sold readily in Buckland. Sparkplugs, snow machine and Honda filters and other parts, and gun cleaning kits were also in demand. They plan to keep increasing their stock until they have no more space to display it all.

While the Gavins provide a great example of what motivated and disciplined people can accomplish, theirs is just one of many new businesses that have started over the last three years. If you have a business idea in mind and feel you have the financial discipline necessary to manage that business, please call our Borough office for assistance and advice.

Congratulations to Frederica and Tim and all the other small business people of the region. We are proud of you.