Writers’ Strike Cripples Small Bizs


Fortune Small Business:

Writers aren’t the only ones sacrificing paychecks to the ongoing strike launched by the Writers Guild of America last month: The work stoppage is also crimping the cash flow of small businesses like History for Hire, Pam Elyea’s vintage rental business in North Hollywood, Calif.

Even though Elyea and her husband began planning for the impending strike a year ago, they aren’t sure how their company will survive if the strike drags on past December.

The entertainment industry generates $80 million a day in Los Angeles, making up 7 percent of the area’s economy, according to the Los Angeles County Economic Development Corp (L.A. CDE). One $70 million film creates an average of 928 jobs, 231 tied to the production and 697 indirectly related, according to the L.A. CDE’s statistics.

“People don’t realize how many businesses are related to Hollywood,” said Mark Deo, executive director of the Small Business Advisory Network., a Los Angeles consulting firm.

History for Hire is trying to avoid that fate. The company supplies props for about 350 clients each year, including television shows such as The Office, Heroes and Cold Case and films like Good Night, and Good Luck. Having survived the 1988 writers’ strike, which lingered for nearly five months, the 22-year-old company saw this year’s work stoppage looming and prepared in advance.

Over the past year, Elyea and her husband didn’t replace employees who left and cut back on big expenses like computer upgrades. When the strike started, they laid off six part-time workers, leaving their company with 12 employees, and got rid of overtime pay. They cut their own salaries 15 percent and limited this year’s holiday party to employees only. To retain the trust of their staff and keep morale up, the couple began sending out a weekly memo updating employees on sales figures and new cost-saving measures.

The strike has required businesses to come up with new survival strategies and creative solutions to the cash crunch, said Hollywood career coach David Brownstein. With their production projects on hold, many of his clients are taking the time off to brainstorm about new financing options and think about their career trajectories.

“They are now forced to look at where there are new business opportunities,” Brownstein said.

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Photo by viewimages.


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