Business optimism rises for new year

Salon Service Group Inc. owners Gino and Dana Barbo are entering 2014 with big plans.

The Springfield-based beauty supply wholesaler finished the year on a high note and broke ground for a $4.2 million capital expansion in the face of topsy-turvy economy and budget-wrangling politicians.

“We haven’t had time to worry about the economy,” said Gino Barbo, whose company posted 2013 revenue of $25 million, roughly triple its precession levels.

Distributing hair care products to beauty schools and salons across 11 states, Salon Service Group is writing its future with a new headquarters fronting Interstate 44 near Glenstone Avenue and plans to add 11 employees.

“If you are doing things the right way and are aggressive in going out and looking for new customers, you can build your business no matter what the economy is like,” Barbo said.

Barbo’s confidence fits with trends observed by Drury University economics professor Bill Rohlf.

“I see a lot of optimism with businesses. They aren’t willing to go gangbusters yet, but I see a lot more optimism,” Rohlf said, noting he expects U.S. gross domestic product growth to approach 3.5 percent this year.

Entrepreneurial moves
Salon Service Group’s moves are in the mix of an entrepreneurial landscape considered strong in Springfield. Score mentor Jack Hubbs said the local chapter’s small-business support activity has taken off during the past two years.

In August, the Springfield Score chapter received the Chapter Growth Award at the organization’s leadership conference in Dallas for assisting 20 percent more clients between October 2011 and September 2012. With 1,285 businesspeople advised, the group was one of eight chapters – out of 384 nationwide – to earn the recognition.

In fiscal 2013, Hubbs said local Score mentors assisted 1,597 people – an increase of 24 percent, setting itself up for another award this year.

“This is really a great market given the size of the market,” Hubbs said.

“You have the health care companies and O’Reilly [Automotive], but the area really isn’t dominated by one local company or entity. That makes it a good place for small businesses.”

Springfield-based D3 Technologies has acted on expansion opportunity in the Dallas market. In December, the digital prototyping and engineering firm opened an office and training center in Carrollton, Texas.

“We had identified Dallas as a market we wanted to expand into before the recession,” said Kevin Schlack, president of the company that consults on equipment design for manufacturers working to get products to market. “We had been expanding pretty fast for the four or five years before, so the recession stalled that. Now that things are turning around, Dallas is a great market for manufacturing companies.”

He said D3, which employs roughly 50 across 10 offices, expects to have up to five full-time employees in suburban Dallas in the next two years.

Schlack’s business plan is buoyed by optimism about the future of manufacturing – an optimism shared by several locally based stainless steel manufacturers. This past year, the Springfield Area Chamber of Commerce assisted nine companies make project announcements with plans to hire 650 new workers, and four of the nine were local stainless steel manufacturers. Schlack said notable clients for D3 include Paul Mueller Co., Boyd Aluminum, Custom Powder Systems, Tracker Marine and Bass Pro Shops.

Uncertainty minimized
Economist Rohlf said national projections call for gross domestic product growth between 2.5 and 3.5 percent in 2014. By comparison, a December projection by nonprofit business and research organization The Conference Board was 1.7 percent for GDP growth in 2013. That group is taking a modest stance with its 2.3 percent GDP forecast in 2014.

Contributing to Rohlf’s optimism is the recent performance of the stock market. Wall Street ended 2013 on an upswing as the Dow Jones industrial average hit a record high of 16,577 on Dec. 31. The blue chips were up 26.5 percent, posting its biggest gain since 1995.

Rohlf said the health care industry is one that nationally saw a lot of merger and acquisition activity in 2013, driven by health care reform.

Burrell Behavioral Health Services enacted a Jan. 1 merger with Clarity Recovery & Wellness treatment center, and in the past year, Skaggs Regional Medical Center in Branson merged with CoxHealth to help upgrade facilities and equipment. Mercy invested $115 million in its southeast Springfield orthopedic hospital and is spending another $60 million on a rehabilitation hospital on Evans Road and a clinic on the former site of the Branson Inn, while construction of Cox South’s $130 million patient tower is ongoing.

Rohlf said changing attitudes in Washington should eliminate obstacles to economic growth.

“For one thing, I think there is less likelihood that Congress is going to shoot itself in the foot again,” he said.

“We’ve got at least some kind of budget agreement, which means we’re probably not going to shut down the government, so one source of uncertainty has been removed.”