“With that we go forward as partners as truly committed with you to make the general aviation component of this airport as fine as exists in this country,” Airport Commission Vice Chairman Ken Maness told TCA President Pam Phillips and Mike Lloyd, TCA’s operations and maintenance manager.

In March 2008, TCRA alleged TCA was not meeting its 2002 lease obligations, which included more capital investment in its operation, spending more on marketing, and maintaining proper security procedures.

TCA officials disagreed with the bulk of those allegations, and both sides entered into mediation talks, which failed.

Both sides apparently started warming up to each other last spring. The new operating agreement, which went into effect Nov. 1, cancels the previous lease begun in late 2002. TCRA also agreed to make new capital investments in TCA’s facilities.

TCRA Executive Director Patrick Wilson said state grants will be sought to help make more than $500,000 in upgrades for entranceways, electrical and plumbing systems, and the north ramp at TCA.

“Our strong suits are with developing the airport, and theirs are with providing services to the general aviation community so we can build a strong partnership in attracting new general aviation customers,” Wilson told the commission.

A primary concern to commissioners has been TCRA’s loss of general aviation aircraft from TCA to surrounding smaller airports, most notably in Abingdon and Elizabethton.

“Given the decrease of ... based aircraft from 88 aircraft in 2001 down to 55 aircraft in 2008, this is an important issue to consider,” Wilson wrote in a previous memo to commissioners. “Based aircraft is an indicator of the general aviation community’s satisfaction with customer service, fees and facilities.”

Both sides agreed to jointly develop customer service standards in the new operating pact.

Maness, a Kingsport commissioner who was unanimously selected as the Airport Commission’s next chairman, thanked Phillips and Lloyd for recognizing a “new environment” in aviation’s tough business climate. Sullivan County Mayor Steve Godsey, who represents Sullivan County on the Airport Commission, said he had been fielding concerns from companies about the situation.

“They were real concerned we were not going to reach an agreement, but I’m glad to see everything has worked out. ... Right now, the public has a real concern about our airport, especially the people in business who have private aircraft they use in their business,” Godsey said.

Airport commissioners decided the agreement would not be transferable without their approval, while the agreement also stated they had no obligation to enter into a new agreement if this one didn’t work out.

Nearly 16 million people can't find jobs even though the worst recession since the Great Depression has apparently ended. The Labor Department said Friday that the economy shed a net total of 190,000 jobs in October, less than the downwardly revised 219,000 lost in September. August job losses were also revised lower, to 154,000 from 201,000.

But the loss of jobs last month exceeded economists' estimates. It's the 22nd straight month the U.S. economy has shed jobs, the longest on records dating back 70 years.

Counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 percent, the highest on records dating from 1994.

The jobless rate rose from 9.8 percent in September.

Sullivan County's September jobless rate was 9.2 percent. In Kingsport the September rate was 9.4 percent. The city-county unemployment data for October is scheduled for release on Nov. 25.

Friday's report is the first since the government said last week that the economy grew at a 3.5 percent annual rate in the July-September quarter, the strongest signal yet that the economy is rebounding. But that isn't fast enough to spur rapid hiring, raising the specter of a jobless recovery.

In addition, many economists worry that persistently high unemployment could undermine the recovery by restraining consumer spending, which accounts for 70 percent of the economy.

One sign of how hard it still is to find a job: the number of Americans who have been out of work for six months or longer rose to 5.6 million, a record. They comprise 35.6 percent of the unemployed population, matching a record set last month.

Congress sought to address the impact of long-term unemployment this week by approving legislation extending jobless benefits for the fourth time since the recession began. The bill would add 14 to 20 extra weeks of aid and is intended to prevent almost 2 million recipients from running out of unemployment insurance during the upcoming holiday season. President Barack Obama is expected to quickly sign the legislation.

The employment report showed that job losses remain widespread across many industries. Manufacturers eliminated a net total of 61,000 jobs, the most in four months. Construction shed 62,000 jobs, down slightly from the previous month.

Retailers, the financial sector and leisure and hospitality companies all continued to reduce payrolls.

But temporary employment grew by 33,700 jobs, after losing positions for months. That's a positive sign because employers are likely to add temporary workers before hiring permanent ones.

Employers became leaner and more efficient in the third quarter. Wages, meantime, remain flat or falling. The result is that productivity — output per hour of work — jumped at the fastest pace in six years.

The good news for companies, though, may be bad news for the jobless. As long as companies can get their workers to produce more, they have little reason to hire — at least until consumer spending picks up. And the squeeze on incomes could depress consumer spending, putting the economic recovery at risk.

Still, some economists were encouraged by the productivity report. They say that eventually, employers won't be able to squeeze more from their staffs. They will then have to ramp up hiring — something that could happen next year, even though the jobless rate is expected to hit double digits.

Productivity rose at an annual rate of 9.5 percent in the July-September quarter, the Labor Department said Thursday. That was much better than the 6.4 percent gain economists had expected. Unit labor costs fell at a 5.2 percent rate.

While companies aren't doing much hiring, they're not cutting as many workers, either. The number of newly laid-off workers filing claims for unemployment benefits last week fell to the lowest level in 10 months

The 9.5 percent productivity rise followed a 6.9 percent surge in the second quarter and was the fastest since a 9.7 percent increase in the third quarter of 2003.

The gain reflected that the overall economy, as measured by the gross domestic product, grew for the first time in a year — at an annual rate of 3.5 percent. The higher output came as companies continued to lay off workers. That meant employers produced more with fewer workers.

The 5.2 percent drop in unit labor costs marked the third straight decline and was larger than the 4 percent decrease economists were expecting.

Productivity is the key ingredient to rising living standards. It lets companies pay their workers higher wages. The increases are financed by the increased output rather than higher costs for products.

But as they struggled with the recession, companies boosted output this year while continuing to lay off workers. They also kept wages down by freezing pay or imposing unpaid furloughs.

"Survival meant cutting costs as rapidly as possible and fulfilling orders with the fewest number of workers," said Joel Naroff, chief economist at Naroff Economic Advisors.

Naroff said hiring could remain sluggish for months. But other analysts are more optimistic. They were encouraged by the productivity report, noting that companies are starting to reach the limits of how much they can produce with their shrunken work forces.

"We believe businesses will have to start to increase hours worked and payrolls around the turn of the year since they cannot expect their current work force to sustain such rapid productivity growth," said Michelle Meyer, an economist at Barclays Capital.

The problem is that consumer demand could falter once the government removes the stimulus programs it has put in place, such as record-low interest rates and homebuyer tax credits. Companies could stop hiring if they think demand will slump again.

In a separate report, the Labor Department said first-time claims for jobless benefits last week fell by 20,000 to a seasonally adjusted 512,000. That's better than economists' estimates of 523,000.

Economists closely watch initial claims, which are considered a gauge of the pace of layoffs and an indication of employers' willingness to hire new workers.

On Wall Street, the better-than-expected jobless claims report and news that retailers posted their second straight month of sales gains in October buoyed investors. The Dow Jones industrial average added more than 175 points in afternoon trading, and broader indexes also gained.

The four-week average of jobless claims, which smooths fluctuations, dropped to 523,750, its ninth straight decline. That's 135,000 below the peak for the recession, reached in early April.

Despite the improvement, initial claims remain well above the roughly 400,000 that economists say will signal job creation.

Another 4.1 million people claimed extended unemployment benefits in the week ended Oct. 17, the latest data available, an increase of about 100,000 from the previous week. Congress has added 53 weeks of emergency aid on top of the 26 weeks typically provided by states.

Still, as roughly 7,000 Americans run out of extended benefits every day, the House is expected to approve legislation that would add another 14 to 20 weeks. The Senate unanimously approved a similar proposal Wednesday.

The National Employment Law Project, an advocacy group, estimates that up to 1.3 million people would exhaust their benefits without the extension.

Economists expect the nation lost a net total of 175,000 jobs last month, adding to the 7.2 million lost since the recession began in December 2007. And many expect the jobless rate could rise as high as 10.5 percent before the recovery gains enough steam to start pushing it down next summer.

Layoffs have continued this week. Microsoft Corp. said it was cutting 800 more jobs at its facilities worldwide. That comes on top of the 5,000 layoffs the software giant announced in January.

Johnson & Johnson said it could cut up to 8,300 jobs as part of a restructuring and Sprint Nextel Corp., the nation's third largest wireless provider, said it planned to trim "dozens" of jobs from its wholesale division amid a drop in customers.

Economic growth could slow early next year as various government stimulus programs wind down, analysts say. That uncertainty has made many employers reluctant to hire and households contending with more layoffs, stagnant wages and depleted savings.

But the Federal Reserve pledged Wednesday to continue to keep interest rates low for an "extended period," a commitment central bank policymakers can make because wage and general inflation pressures have vanished during the downturn.

The legislation, recognizing the lingering distresses of the recession, passed the Senate Wednesday on a 98-0 vote and could come up in the House as early as Thursday, sending it to President Barack Obama for his signature.

House Majority Leader Steny Hoyer, D-Md., said the bill was "vital to Americans who have lost their jobs as a result of the deepest recession in over three-quarters of a century."

The bill, with a price tag of some $24 billion, would provide every American running out of unemployment insurance benefits this year with an additional 14 weeks. The out-of-work in states with jobless rates at 8.5 percent or greater would get six weeks on top of that.

It would also extend for seven months an $8,000 tax credit for first-time homebuyers that was enacted as part of the $787 billion stimulus package passed last February and is set to expire at the end of this month. The program would be expanded with a $6,500 credit for homebuyers who have lived in their current residences for five years.

Finally, it would allow businesses that have incurred losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years.

The package, said Sen. Jeanne Shaheen, D-N.H., a leader on the unemployment issue, will "help nearly 2 million Americans who are still unable to find work, protect small businesses struggling in this challenging economic climate and stimulate economic activity to help create jobs and grow our economy."

The extension would be the fourth since June of last year and could result in giving an out-of-work person in one of the harder-hit states up to 99 weeks of benefits, well above the previous record of 65 during the 1970s.

Supporters argued that this help was necessary when 15 million unemployed are competing for about 3 million jobs and 7,000 people are exhausting their benefits every day.

"There is no place today in the United States that does not see a serious crisis in unemployment," said Democratic Sen. Jack Reed of Rhode Island, where the 13 percent unemployment rate exceeds the national rate of 9.8 percent.

The $2.4 billion cost of extending unemployment benefits is offset by extending through June 2011 the federal unemployment tax that employers pay for each employee.

The Fiscal Review Committee, a joint House-Senate panel, on Wednesday heard a report on the University of Tennessee's Biofuels Initiative that said the project cannot be self-sufficient as originally promised. The committee delayed its approval of an amendment to a contract on operation of the facility that involves about $11 million of the funding.

Sen. Bill Ketron, a Murfreesboro Republican who chairs the committee, said the project was approved at a time when the state was "flush with cash." Now, the state faces major revenue shortfalls with prospects of state employee layoffs and more budget cuts coming next year.

"This program may need re-evaluation," Ketron said. "We're going to have to turn over every rock to balance this next budget."

The report was presented by Jim White, the executive director of the committee's staff, and included videos of officials describing the plan in 2007, when it was approved at the urging of Gov. Phil Bredesen.

Those statements were contrasted to the status of the project now, which has undergone changes including a new developer and a scaling down of the expected production. The pilot project refinery in rural Vonore, in East Tennessee, is scheduled to open next month.

The original projection of a facility producing 5 million gallons of ethanol per year was based on Department of Energy estimates for the size needed to be commercially viable. Under the current plan, the research refinery will produce about 250,000 gallons of ethanol, enough to determine whether the processes will work for a full-size refinery.

Genera Energy, LLC President and CEO Kelly Tiller defended the changes, which the State Building Commission had approved.

"We became convinced the 5 million gallons was too big to be affordable and operate cost effectively going forward (as a research facility) but not big enough to be a commercial operation in the future," she said.

But lawmakers said they were disappointed by the changes.

"I'm absolutely crestfallen. This is absolutely not good stewardship of taxpayer dollars," said Rep. Tony Shipley, R-Kingsport.

They also questioned whether the development partner, DuPont Danisco, would draw the most benefits from the project.

"It looks like we're just leasing them a building," said House Finance Committee Chairman Craig Fitzhugh, D-Ripley.

Building the plant has already cost $55 million so far for construction and equipment, with $36.7 million coming from the state and the rest from DuPont, the report says.

Tiller said the project has "tremendous potential" and has been integrated into other research and development at UT and Oak Ridge National Laboratory. It has received $15 million in federal funding.

The primary purpose is to generate data for research that leads to a commercially viable industry in the future, Tiller said.

Read the full report at the Tennessean's Web site.

ABINGDON — The curtain may soon close on the Moonlite Theater after more than a half century in operation.

Owner William O. Booker recently closed the historic drive-in for the season and is asking for the public’s help to open it again next year. The sign on the marquee reads: “Help Save the Moonlite.”

“I know everybody’s going through hard times. But I can’t keep spending $50,000 every year to keep it open,” Booker said.

Since the early 1950s, the Abingdon drive-in has attracted movie-goers throughout the region, from Wytheville to Morristown. It’s considered a Virginia state historic landmark and is listed on the National Register of Historic Places.

Booker started working at the Moonlite in 1970 as an usher and eventually bought the theater in 1992. He said the facility survived tough economic times in the 1970s and 1980s when drive-ins lost popularity among theater-goers.

The 1990s were better for business. But this latest economic downturn, coupled with increased competition from new theater complexes in Abingdon and Bristol, have been tough on the drive-in, Booker said.

He pointed out the theater was featured a few years ago in a USA Today article, which mentioned that there weren’t many theaters in the area.

“The next thing I know, a 14-plex pops up seven miles toward Bristol and a 12-plex pops up in Abingdon,” Booker said. “It didn’t help.”

All the while, Booker has kept admission prices low, charging just $5 for two movies.

But the decline in attendance has been hard to overcome. And parts of the theater have fallen into disrepair.

Booker noted that the marquee itself needs some work.

“But I’ve been trying to save every nickel I can to stay open as long as I can,” he said.

“It’s just a bad time right now financially. We’ve got to keep pushing and keep going and keep trying.”

Booker said he plans to contact state and federal legislators for help and is hoping the public will chip in as well.

For more information on the Moonlite or how you can help contact Booker at 335-8395.

Eastman Chemical spokeswoman Wanda Valentine said the spill occurred a week ago, when 2,150 gallons of acetic acid were accidentally released from the plant into a discharge channel leading to the Holston River.

Valentine said there was no danger to human health since the material diluted quickly. However, some fish near the plant were affected. Valentine said Eastman reported the incident to the U.S. Coast Guard National Response Center, Tennessee Department of Environment & Conservation, Tennessee Emergency Management Agency and the local emergency planning committee.

She said Eastman also notified users of the river water downstream from the plant. The company is investigating the cause of the spill.

WASHINGTON — The government’s “pay czar” expects compensation plans for additional employees at the seven companies getting the biggest bailouts to be in place by year’s end, while the Federal Reserve will soon start its own work on banks’ pay practices.

Kenneth Feinberg, the Treasury Department official overseeing compensation at the seven bailed-out companies, said Monday that he hopes “to come up with consensual plans” for highly paid employees beyond the top 25 at each firm.

Feinberg already has announced plans to slash pay for the top 25 executives at the seven companies: Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors Co., GMAC, Chrysler and Chrysler Financial. Now he is working on designing compensation structures for 75 additional employees at each one, ranking 26 through 100.

For those executives, Feinberg intends to set up a general plan within six weeks to govern their 2009 pay, he said in a speech at a conference on executive pay organized by the University of Maryland’s Robert H. Smith School of Business.

Then comes the next goal: A program for 2010 compensation packages for the top 25 executives at the seven companies, hopefully within the first quarter of the year, Feinberg said.

The Federal Reserve, meanwhile, will soon begin work to get a broad picture of U.S. banks’ pay practices, part of a larger effort to crack down on plans that encourage irresponsible risk-taking by employees, a Fed official told the conference.

Fed Governor Daniel Tarullo, the central bank’s point man on the issue, said the Fed plans to “commence shortly” a so-called “horizontal” review to compare and contrast information across the nation’s biggest banks. Supervisors at the Fed’s regional banks, staff at the Fed’s headquarters in Washington and other financial regulators will take part in the review.

Fed officials previously have said they don’t anticipate making the results of such a review public, unlike “stress” tests conducted earlier this year to determine how big banks would fare if the economy were to take a turn for the worse.

Tarullo’s remarks came as the Fed supervisors met Monday with executives of the top 28 U.S. banks to discuss the Fed’s compensation initiative.

“In discussions across the country, we are communicating our plans and expectations to these firms, with particular attention to beginning this information gathering,” Tarullo said.

The goal is to ensure that banks integrate their pay practices “completely” into their schemes for managing risk, he said in response to a question. The Fed’s work eventually will be coordinated with other federal bank regulators.

Under the Fed plan, the 28 biggest banks — including Citigroup, Bank of America and Wells Fargo & Co. — will develop their own plans to make sure compensation doesn’t spur undue risk taking. If the Fed approves, the plan would be adopted and bank supervisors would monitor compliance.

At smaller banks — where compensation is typically smaller — Fed supervisors will conduct reviews. Those banks don’t have to submit plans.

The Fed’s goal is to make sure compensation policies for executives, traders, loan officers and other employees don’t spur reckless gambles that could endanger the bank and the broader financial system.

Feinberg reaffirmed in his speech that he was reluctant to use the authority he has to “claw back” compensation at any company that received money from the $700 billion bailout program and still hasn’t paid it back.

Use of the power to take back compensation should be very narrow and limited to “egregious cases” of executive benefits, he said. Clawbacks aren’t planned to be part of the current discussions with the companies on the 75 additional employees, he told reporters after his speech.

Feinberg also said he was surprised that his directives for cutting pay at the seven companies, which take effect this month, were “fairly well received for what they are designed to accomplish.”

Under the plan, the seven companies must cut their top executives’ average total compensation — salary and bonuses — in half. Cash salaries for the top 25 highest-paid executives will be limited in most cases to $500,000 and, in most cases, perks will be capped at $25,000.

At issue is Wall Street’s longtime pay system that rewards those who make the sort of high-risk bets that triggered the worst financial crisis since the Great Depression. Only a year after the financial crisis peaked, the biggest banks are already making billions of dollars again placing risky bets with help from cheap government loans and other federal subsidies.

If those bets were to go bad, the loss to taxpayers could be immense. That’s led some critics to call on the government to ban big commercial banks from trading risky securities — or shrink them so their collapse wouldn’t jeopardize the economy.

The Obama administration has resisted such calls, opting instead to seek the authority to take over and wind down large banks that get into serious trouble.

WASHINGTON — Many communities hit hardest by job losses, those built around dying factories and mills, have been slowest to see relief from President Barack Obama’s stimulus plan, underscoring how hard it is for Washington policymakers to create lasting work in areas that need it most.

The manufacturing industry has shed hundreds of thousands of jobs during the recession as plants have closed or scaled back. Places such as the southwest Missouri city of Lamar, tucked amid endless fields of winter wheat and soybeans, have seen the cornerstones of their economies disappear, leaving a gap that even billions in roadwork and government aid cannot fill.

Lamar began feeling the recession ahead of the rest of the country, when the furniture-maker O’Sullivan Industries closed its doors in mid-2007, immediately leaving 700 workers unemployed and turning its factory into a million-square-foot vacancy.

That began what city manager Lynn Calton calls “a slow death.” Stores folded. A 50-year-old car dealership went under. One in 10 jobs disappeared last year. Everyone suffered, from the downtown florist to the dentist who cleaned the factory workers’ teeth.

Even Mayor Keith Divine filed for unemployment when his furniture store went out of business. He now sells carpet and mattresses and says he hasn’t seen evidence of the 640,000 jobs saved or created nationwide thanks to the $787 billion stimulus.

“What work? Where?” Divine asks.

For the Obama administration, Lamar is as much a problem of expectations as it is of policy. For all the items contained in the stimulus, from tax cuts to road work to new schools, nothing could quickly replace what factory towns like Lamar had lost.

That’s why the White House says it’s unfair to judge the stimulus by the unemployment rate because no amount of stimulus was going to keep Lamar’s unemployment rate from approaching 12 percent.

Nationwide, only 2,500 of the 640,000 stimulus jobs announced Friday were in the manufacturing industry, and many of those appear to be mislabeled. Teachers were the biggest winners because states used federal aid to fill budget gaps, then credited the money with avoiding layoffs — even if no such layoffs were planned.

“We haven’t seen any improvements in our town,” said Gary Macklem, the mayor of Croswell, Mich., a small city in a county built on farming and factories, where unemployment has hovered just below 20 percent all year. “We lost two factories and the other factories are hanging by a shoe string.”

One of the goals written into the stimulus was to help “those most impacted by the recession.” And there are provisions to do just that, from increasing unemployment and Medicaid benefits to paying for worker retraining. Places such as Croswell and Lamar also probably would have been worse off if their states had endured their budget crises without federal help.

And there are billions of dollars to upgrade the electrical grid and encourage alternative energy, an historic investment expected to spur manufacturing of wind turbines, solar panels and clean-running buses.

“Will the stimulus program by itself turn around the decades-long decline in that sector? Of course not,” said White House economic adviser Jared Bernstein. “But it will help, and it will help in some of the most key areas, where manufacturing can shift from contracting to expanding.”

Such benefits are harder to see than a job and a paycheck. In manufacturing towns, those have been difficult to create. When they appear, they’re not what the town is used to.

O’Sullivan Industries was the kind of company that hired kids right out of high school, a company where workers could eventually pull down $16 an hour and work overtime when the plant was running six days a week. Some employees had been there for 30 or more years. People who wanted to start a family and put down roots in their hometown could go get jobs at O’Sullivan.

The stimulus can’t create those types of jobs, at least not directly and not right away. So despite Lamar’s need, the county saw just 22 jobs from the stimulus. They are temporary positions working on a local highway project, not the kind of thing someone from O’Sullivan could easily walk into.

“They were building ready-to-assemble furniture. Somebody out there pouring concrete is a whole different job,” said Calton, the city manager. “I don’t know if those people were able to get on with someone doing a highway project.”

They weren’t. The highway contract went to a company that brought in crews from hours away.

Those workers count themselves as lucky, but already fear what may come next. One man has a toddler and said he’ll take dishwashing jobs to get by once the stimulus project is over. Word down at the union hall is that things haven’t been this bad in 10 years.

“You put your name on the list, and you’re No. 90 or No. 106,” said Bob Williams, who has worked construction since 1968. “You ain’t going to work tomorrow.”

In Monroe County, Ala., Georgia-Pacific Corp. idled its plywood mill this year, leaving 300 workers without jobs. In August, Fruit of the Loom closed its dye plant, laying off more than 100.

These were good jobs with benefits and retirement plans, said Mike Kennedy, the mayor of the county seat of Monroeville, the childhood home of author Harper Lee and the likely inspiration for the town in her book “To Kill a Mockingbird.”

Unemployment is approaching 19 percent and the city budget is strained. Kennedy said he’s hoping to receive stimulus money to make buildings more energy efficient. That would create some jobs.

But so far, Monroeville has seen just 8 jobs from the stimulus, according to the latest data.

“We got stimulus money to build sidewalk,” Kennedy said.

It may have been a local case — with a heavy dose of involvement from outside investors — of what former Federal Reserve Chairman Alan Greenspan once referred to as “irrational exuberance,” a longtime local mortgage broker says.

“There was just a few of those projects that stood out in your mind a little bit, and that was one of them that seemed to be overpriced even at the height of the market,” says Steve Reed, who received several lot loan proposals for Grande Harbor property around the end of 2005.

Read the full story on the Johnson City Press site.

KINGSPORT — Wayne Patterson worked for the same auto dealership for nearly 30 years and expected to retire from the business.

But last summer the certified master mechanic was told his job was being eliminated.

Patterson, 51, started searching for a comparable job, but no one was hiring. So he did what hundreds of thousands of unemployed Americans are doing across the country — he started his own business.

On Sept. 10, Patterson opened DP Automotive on East Stone Drive, specializing in automotive repair and service.

“I thought, at this time in my life, I’d give this a go,” said Patterson. “Anybody can fail, but if you never try, you never gain.”

Out of the recession

Small business counselors say they’ve been busy during the recession — not only trying to help existing businesses stay afloat, but also working with would-be entrepreneurs, many of whom have lost their jobs and are trying to start a business for themselves.

Aundrea Wilcox, executive director of the Kingsport Office of Small Business Development & Entrepreneurship, said she’s met with lots of people in the last year who’ve looked into starting their own business. Some have already lost their jobs; some are still employed but want to create a backup job “just in case,” Wilcox said.

“People are smart,” she said. “They’re thinking — ‘What can I work on as my backup?’ Lots of people are starting businesses of their own.”

Chip Bailey, manager of the Holston Business Development Center small business incubator and counselor with the Tennessee Small Business Development Center, said lots of folks have ideas for a new business, and many of them proceed with their plans during an economic downturn.

“At any given time in America, 70 percent of the adult population has a small business idea in the back of their heads. And they want to go forward with it, if they can figure out a way to do it,” Bailey said.

He teaches a monthly class titled “So You Want to Start a Business” to help people realize their dreams.

In his classes, Bailey tells would-be entrepreneurs what they need to do to pursue their plans, such as where to get a business license and types of insurance they may need.

He also tells them to prepare a written business plan, and gives them advice on financing their new venture.

Too often, Bailey said, people who want to start a business assume they can get government grants to do so, and that just isn’t true.

“It’s just an urban myth,” he said. “People come in and say, ‘I’m here to sign up for that grant to start a new business.’ We had to print up a pamphlet on that, explaining to people that there is no such thing as free money.”

He said most banks want the entrepreneur to come up with at least 20 percent of what it will take to start the business, plus collateral for the other 80 percent.

Bailey said some people also have misconceptions about Small Business Administration loans, thinking those are given directly to individuals.

“The reality is, they loan to banks. They make it easier for banks to loan the money,” Bailey said.

He said SBA loans are good to get, but they have strict requirements. For instance, the borrower must have a good credit score of 740 or more, and he must have collateral to back the loan.

Bailey said he also tries to get people to put themselves in the banker’s shoes.

“He’s thinking, ‘Can this person pay this loan back with interest on time? Is this business plan feasible? Is this business needed in Kingsport? Is the customer base there?’

“A lot of what we do is a reality check. And I probably run some people away simply because I tell it like it is,” Bailey said.

“Just because somebody tells you you make good salsa at home doesn’t mean you need to start a Mexican restaurant,” he added.

Making the transition

For Wayne Patterson, starting a business came as a necessity.

Patterson began working at the local auto dealership in 1980 and received certification as a master mechanic. He worked there until 1990, when he got a job at Mead Corp. in downtown Kingsport. When Willamette Industries acquired the Mead paper mill in 1995, Patterson returned to the auto dealership.

“They were like family,” Patterson said.

But the recent recession hit the business hard. Employees were notified last summer that their jobs would be eliminated.

Patterson didn’t waste any time. Before he was given a pink slip, he decided to start his own business with help from Daniel Durham, who had worked with Patterson at the auto dealership for 10 years before being told his job, too, would be phased out.

Patterson and Durham attended the “So You Want to Start a Business?” class led by Chip Bailey.

For Patterson, the hardest part of getting his business started was trying to find financing. He was turned away at bank, after bank, after bank.

“Everywhere you go, the first question they ask is, ‘How long have you been in business?’ And that was it,” Patterson said.

Left to his own resources, Patterson pooled his money and took out a loan against his motorcycle to raise $15,000 to start the business.

Handling the day to day chores of operating a business has also been a challenge.

“Before, you just turned the wrench and did the work. Now, you have to greet the customer, write the work order, call about the parts, work up an estimate with labor and parts, call the customer, do the job, handle the money,” Patterson said. “It’s a little more stressful, a lot we never anticipated.”

Still, business is going well, he said.

“It’s going to take some time, but we’re paying the bills and we’re growing. We’re not booked up everyday but we’ve had something to do every day. I think we’ve done well for just starting out. We’ve been blessed,” Patterson said.

Home-based business

Wayne Patterson rented a storefront to start his own business. But many people nowadays are launching home-based businesses to save on overhead.

That’s what Lynn Jobe did after he lost his job in February.

Jobe had worked at Holston Builders Supply for more than 35 years when the company announced it would close earlier this year.

“I drew unemployment and looked for another job. But I had always wanted to start another business,” said Jobe, who had operated a lawn service on the side since 1993.

After being laid off from Holston Builders Supply, Jobe decided to start an office cleaning business. He set up a limited liability corporation (LLC), got insurance, and started working out of his home.

“It’s real hard to get started, and in this down economy, more businesses are using their own people” to clean offices, Jobe said.

In addition to the office cleaning business and lawn service, Jobe went to work as a temporary employee last summer, and got a job with the Kingsport Area Transit System (KATS). Last week, he was hired full time as a van driver with KATS.

Even though he’s now working full time, Jobe said he plans to continue his office cleaning business and lawn service on the side.

Jobe said people who have second jobs need to keep motivated.

“One of the most important things is being motivated enough to go out and do it when you’re tired,” he said. “I think everybody has talents and things they can do. But you’ve got to be willing to work.”

For more information on starting a business, visit the Kingsport Office of Small Business Development & Entrepreneurship online at www.kosbe.org or call KOSBE at (423) 392-8801.

You can also go to tsbdc.org for advice from the Tennessee Small Business Development Center, or contact Bailey at cbailey@tsbdc.org or (423) 578-6235.

The Holston Business Development Center is online at www.hbdc.org.