Desmond Ng is the co-founder and owner of “Amazebowls,” a trendy, popular food truck that can usually be found situated on the outskirts of USC. Contrary to the stereotype, Amazebowls doesn’t sell the stereotypical greasy street fare one might expect; instead, this bright purple truck offers customers fresh and tasty acai (ah-sigh-ee) bowls, topped with fruit and granola. Described by Ng as a “healthy alternative to ice-cream or sorbet,” these vegan and gluten-free treats offer health-conscious students a delicious replacement to the usual fast food options offered at USC.

Amazebowls was founded in August 2013 by Desmond Ng and Bryan Leong after the two came across the concept in Santa Barbara. “I pretty much fell in love with them,” Ng admitted. “However, when I came back to LA, I realised that hardly anyone was selling it. Places that did sell it were either too expensive or not that good at all. So I started making them at home, and my friends told me that if I wanted to start something with it they’d invest in it. So we tested it out at SC – we trialled it at a couple of different events like Taste of Downtown LA, KXSC-fest, Springfest, Study Nights… and the response was really positive.”

One of the most difficult obstacles for a small business is finding initial capital – whether that be through loans, investors, or one’s own savings – especially in the current economy. According to Gallp Inc., 28% of small businesses indicated that they were less optimistic about their business’ future going into 2014 than they were going into 2013. While Ng was fortunate enough to have two close friends who were willing to invest in him and the product, he too struggled to initially start his business. “We wanted to start a store, but we couldn’t find a good location at a good price,” said Ng.  “A food truck was our next best option.”

As Amazebowls is a relatively new business, it hasn’t had much time to adapt to the ever changing economic cycles. Furthermore, its main customer base – USC students – doesn’t seem, at least in the short-term, too frugal about spending their disposable income. “We haven’t really been affected so far from the recession,” said Ng.

However Amazebowls still had is main share of challenges. Ng lists the factor of uncertainty as one of the biggest challenges in running his business. “It’s [the food industry] very competitive,” explained Ng. “We have to do a lot to make ends meet – even though we get a lot of sales, the costs are really high. The costs of running the truck, wages, running costs, etc. It all adds up.” Furthermore, the recent opening of “Nectar,” a juice bar on campus serves as another competitor to Amazebowl, targeting a similar audience.

While Ng doesn’t have to pay rent, owning a food truck offers a different set of challenges. “Sourcing a food truck is not cheap, and a lot of people don’t realise how big the expenses are,” explained Ng. “Also, a lot of things are just out of our control. It’s not like a store where things are fixed and people can deliver to you – we only have a certain amount of space in the truck and we have to restock every day. It takes a few hours for us to get all our supplies. It can also be difficult finding parking. If we don’t find parking in the morning, we can lose crucial hours of business which cuts into our profits.”

Amazebowls is also heavily affected by the weather and the seasons. “The weather definitely affects our business – even more so because we’re a food truck. People don’t like coming to food trucks when it’s cold,” said Ng. “We also definitely felt that there was less business after big holidays like New Year’s and Christmas – people had spent too much during that  time and were not as willing to go out as much to eat.” Furthermore, the colder weather has not only decreased their customer base but also increased costs. For example, since the summer, the price of strawberries – a main fruit in the acai bowl – have gone up dramatically, further affecting Amazebowl’s profit margins.

A major concern which has not only Ng but other food truck and small business owners worried is the possibility of minimum wage going up. “Right now, we’re reworking our cash flow just in case minimum wage goes up,” explained Ng. “That’s a big thing. A lot of food truck owners that I speak to are worried that the increase in minimum wage will affect their businesses. Basically you’ll have to either raise your prices or absorb the losses – and that eats into your profit a lot.” When asked whether Ng will resort raising prices if wages do go up, Ng showed reluctance. “I’d rather not,” he admitted. Instead, Ng hopes to be able build a larger, loyal customer base with aggressive and clever marketing techniques so that profits maintain high.

In the future, Ng hopes to be able to expand Amazebowls into an actual store – however the challenges that come with that are immense. Rent is a main factor, with the average price per square foot in Los Angeles increasing 13.8% from last year to $428. “A lot of food trucks try and get into stores and they end up being unsuccessful,” said Ng. “We did a lot of research, and it’s a lot easier for a restaurant to get a food truck than a food truck trying to become a restaurant. We have to do a lot more research, and wait for both us and the economy to be in a good place.”

 

Tuhao, a Chinese word, has been getting very popular since last September on the Internet. BBC magazine translated it as “nouveau riche”, someone who comes from a poor peasant background, and has made it rich quickly – but  doesn’t quite have the manners or sophistication to go along with it. “Tuhao, lets be friends!” has become one of the hottest topics in China.

According to National Bureau of Statistics of China, GDP has increased 7.7%  from last year, which is higher than the predicted number 7.5%. However, that is the lowest increase since 1995.  International trade also decreased from  2012. A famous economist, Nouriel Roubini said to CNNMoney last week that  50% of China’s economic growth comes from the government.  That’s not sustainable. Honestly, China could be called as a big Tuhao with its GDP increase, but most Chinese people are not even rich with 38,420.38 RMB GDP per capita. China is experiencing an inflection point now. The magic “8” growth rate helped some people to be very rich fast and then they started to invest all over the world. As we know, investments, exports and consumption are three supporting elements for China’s GDP increases.

“Tuhao” style investment- Vineyards buying

A Chinese businessman who just bought a vineyard in France died in a helicopter crash after his vineyard tour with his son, according to The Wall Street Journal. Vineyards investments unveiled because of the news. Chinese businessmen bought more than 60 vineyards in the past five years. The Chinese population consumed about 156 million 9-liter cases of wine in 2011, placing it in fifth place among the top wine-consuming nations worldwide, according to Vinexpo’s study. It also predicts a 36% increase in wine consumption in China vs. 9% in the rest of the world, a 54% rise from 2011 to 2015.

“Tuhao” style investment- Luxury shopping

According to United Nations World Tourism Organization in 2013, Chinese travelers became the world’s biggest spenders, shelling out about $102 billion overseas. It predicts that by 2015, total Chinese spending abroad will exceed total global luxury sales. The reason that so many Chinese travelers buy luxury goods from outside country because its extreme high import duties, which add up to 60% to the original price in China, according to Quartz. Therefore the rich Chinese people prefer to travel outside China.

“Tuhao” investment- Expensive houses

According to the National Association of Realtors, Chinese are now the second-largest foreign buyers of homes in U.S., accounting for $7.4 billion of sales in the 12 months ended March 2011. Because of the housing bubble in China, more rich people choose to investment homes in U.S.. Most of them probably concern about China’s political instability, inflation, food safety even pollution.

“Tuhao” investment-Venture Capital

The China’s top political advisors discussed reform in science, innovation and technology last December, which put forward proposals on the management of investment for scientific and technological development…building an environment for promoting innovation, the transformation of scientific achievement, according to Xinhua news agency. At the same time, more U.S. tech startups hope to find investors from Chinese and start their business in China. Chinese venture capital firms backed 28 U.S. companies in 2011, nearly double the number two years earlier, according to Dow Jones VentureSource. China’s magic growth, large population and government’s desire set a stage for more deals between China and U.S. technology companies.

“Tuhao” China has developed so fast these years. I think it’s the time to slow down and wait for the people.

 

 

 

 

 

 

 

 

 

 

 

 

 

A research team from Reuter’s posted a pair of charts (see Figure 1 below) with nearly paralleled curves back in 2011 which suggests that Macau’s gaming revenue tells a lot about China’s economy. The curves reveal not only how China’s collective wealth has grown, but also where that big chunk of money is going, given the fact that many managed to legitimize shady income amid the buzz at the world’s new casino capital.

China’s GDP boom since around 2003 has created new wealth among heads of national conglomerates as well as regional manufacturing-oriented powerhouses. Some city officials – the likes of Bo Xilai and Liu Zhijun – also took their share from doing “favors” to businesses cutting deals for government contracts. Whatever their day jobs may be, these people are the “high-fliers” when they land at Wynn’s VIP room in Macau. And change in Wynn’s gaming revenue often suggests tweaks in the Chinese government’s grip on its economy and its mega rich.

Figure 1. Macau Gaming Revenue and China GDP

Chinese high rollers made up nearly two thirds of Macau’s gaming revenue, not out of their love for throwing dice, but because they saw Macau a good fit for money laundering, according to an article from The Economist. With enough help from an apt junket, a corrupted government official who has taken bribes in yuan can readily swap his filthy money into Macanese pataca at a gambling table. A billionaire who has cut corners to get rich and wants to elude future scrutiny when political tide changes can turn most of his fortune into foreign dollars and hoard them better. In some other cases, the rich simply don’t want to put his money at home.

These are the main players in China’s economy, and the way they’ve chosen to do with their money reveals two things: a) a big chunk of the new wealth has left China instead of being reinvested into sustainable economic activities; and b) there is a trust issue between China’s nouveau riche and Beijing because the latter still has authority to crush someone’s property for no solid reason.

When China’s new leadership laid down rules in early 2012 to crack down on lavish spending and its more recent rein in corruption, we’d expect them to have an impact on Macau’s gaming revenue much as they did to the sales of foreign luxury brands. The cynical ones on social media, however, said the new measures would always be staying just on paper.

If we check Macau’s gaming revenues for answers, it presents a different story, as world-class alcohol makers and watchmakers took hit from Beijing’s gift crackdown.

China’s inflation-adjusted GDP changed less in 2013 than a year earlier, going upward by 7.2 percent and 10.3 percent respectively (see figure 2 & 3 below for real GDP calculation).

Figure 2. China GDP Annual Growth Rate 2006-2013
 
Figure 3. China Inflation Rate 2006-2013
During the same period, however, Macau’s gaming revenue kept climbing in two consecutive years despite a slowdown in China’s economy. The number went up first by 13.5 percent in 2012, and again by 19 percent one year later, according to Yahoo News and The Wall Street Journal. Meanwhile, there has been a flurry of Chinese tourists touring and buying real estates in the U.S. The rich folks may have sped up transferring their money outside China as Beijing’s new leadership tightens its grip.

At Advanced Cleaners on the corner of Vermont and 29th, price tags have remained unchanged for 8 years for one reason: it serves Trojans, or, USC students. The owner, Hertsel Mofarrah, adorns the storefront as if it were an alumni house. Much of its red counter is covered with snapshots of USC life, and most words left on the photos were addressed to Aunt Ruby, the front desk sweetheart lady who left the job half a year ago when she turned ill.

Ruby’s successor, Urania Blanco, is from El Salvador, the smallest and the most densely populated country in Central America. She rushes out from the rear of the store when the doorbell rings, collects the dirty pieces, and numbers each one of them before putting them in a to-go basket. In the afternoon, Mofarrah comes in and picks up the batch. He sends the clothes to Royal Cleaners on Robertson Boulevard, and drops them off again at his USC cleaner a day later. The shirts and suits have been properly cleaned and pressed. Blanco does a last shave and hangs them in order on a conveyor.

Mofarrah runs both cleaners, but he hasn’t become his own chauffer until the USC business took hit of the recession in 2008. He used to have a line of seven workers at Advanced Cleaners attending to every step of the dry cleaning process. When business turned sour amid the larger economic downturn, the full-fledged crew was reduced to nothing but one receptionist at the counter. He halved the 1,800-square-feet place, leasing the other part out. The machines were also removed. At what later became Mofarrah’s main storefront on Robertson, he had to let go of two people that year to survive the national crisis.

But he says the profit is still shrinking mainly due to a rising cost of labor. Five years into a sluggishly rebounding economy, 70 percent of his business revenue still goes into offsetting expense in climbing wages, chemicals and utility. “The minimum wage has gone up, and my guys don’t settle for the minimum wage because the dry cleaning business relies on trained professionals with rich experience,” says Mofarrah.

He hires five people at Royal Cleaners, where a dry cleaning machine and other amenities are stationed. When a customer brings in a pair of pants for dry cleaning, it goes to the spotter first. The spotter, who gets paid $14 an hour to remove all types of stains using the right chemicals, holds the most lucrative position of all five employees. The tailor has the second fattest paycheck. The whole team has enjoyed raises in the past few years, says Blanco, who worked among them before being transferred to the location near USC.

When Gov. Jerry Brown signed into law the bill that would raise California’s minimum wage to $10 an hour by 2016, it left workers upbeat and small businesses worrisome. While the raise comes in two phases in the next two years, the 25 percent hike would push California to be on top of every other U.S. state in terms of minimum wage and is estimated by the L.A. Times to deliver extra money to around 2.4 million Californians.

For Mofarrah, the USC branch of his laundry business seems self-perpetuating once he bought up the place in 1998. Costs are easily contained now that there is only one employee. And the utility fee is just a tiny fraction of what he pays at Royal Cleaners, where rent has also climbed up by five percent each year. To fulfill a daily task of cleaning 500 pieces, from both storefronts, he now pays a monthly of $1,000 for gas, and another $1,000 for water and electricity. Even the price of plastic bags has doubled from 5 years ago, he says, and the government ridiculously charges him $7 per gallon when its people comes in to collect barrels of chemical waste. The price tag was $2 fifteen years ago.

In response, Mofarrah raised the price for dry cleaning by an average of 50 cents at the end of last year — at Royal Cleaners only. The price for dry-cleaning a pair of pants climbed from $5 to $5.5. But USC students still get the old price of $5, or 50 cents less on discount. “We know it’s hard for students to spend a lot on laundry, so we keep the price low,” the father of a USC Medical School alumnus says.

Mofarrah’s USC business receives about 150 pieces every day, and handles the cleaning of theater costumes and marching band uniforms. But summer strikes him as a truly bleak season for his laundry business because 80 percent of Advanced Cleaners’ customers will be gone. “The students are home, and there is nothing,” he says. Blanco became so bored last summer that she made a pair of crochet stool covers in her free time at work, in red and yellow. They are now part of the store’s USC flair.

Harry’s Berries Gean Family Farm, an organic fresh produce grower, plans to increase some of its products’ prices in next month if the record-breaking severe drought facing California prolongs this year.

Jennifer Gean, the owner the 27-year-old organic produce firm, projected a one-dollar-per-three-packs uptick next month for most of the organic berries her farm produces because the water price has gone up significantly for the past year resulting from the third straight year with below normal rainfall in California.

“As a berry specialty grower, we are very much depending on the water supply. Last year, it might probably be OK, but if the dry situation continues, we have to start very worrying, “ said Gean.

In effect, the firm has increased its products’ prices from time to time in the past few years.

“Last year, it went up a dollar because of related-overheads increase like fuels and supplies. Another thing is that we pay a much competitive rate to our employees. They are very well trained and hard-working. That does add to our overheads as well,” said Gean.

But according to Gean, the multiple price increases do not affect the farm’s revenue even though in financially difficult times because of its good reputation, combined with people’s perpetual willingness to eat healthy.

“Despite the sluggish economy in recent years when people have to be a little frugal out of necessity, they are still willing to pay it because of the quality. A good thing for us is we are in food industry and we are doing fresh produce. It the last thing people will save money on. We have royal customers to support us regardless of we having to increase the price and they continue to shop. It is a long-term investment to health,” said Gean.

Despite the deepening drought plaguing California, not every organic farm has experienced price fluctuation resulting from severe water shortage. Organic Santa Babara Pistachio Company is one of them.

Mary Mills, a worker at the farm, said the prices of the companies’ pistachio are pretty much stable in the past two years.

“The water shortage does not affect pistachio because pistachio trees do not require much water as other trees. But most of my neighboring famers are struggling. They drill the wells and they have to drill deeper and deeper, and they have to invest a lot of money on that. Then they will have to increase the price to make up for the investment,” said Mills.

Compared with economic cyclical shifts, many farmers say, their business is far more dependent on weather factors. Many of them rather use their own properties than taking out loans from the bank except in financial woes.

“We take our small business loans and things like that. We will have to plant out strawberry every year and new plants are big investment. If we have a not good financial year, we will have to resort to borrowing. But for the most parts, we tried to save up enough thought the year. We make more during those peaks of the seasons in the summer and save for the winter,” said Gean.

“Until this year I did not feel the recession at all – this is really weird” says Gopal “Paul” Sood.  Paul runs the 23^rd St Café in the North University Park neighborhood of Los Angeles and for five out of six years it has been a success. Since August Paul has at had to reduce manpower by more than half to keep his restaurant running “I only have two or three people working here now. Between three and six pm I tell them to go home, take a break, they see their kids after school.” What has changed?

One culprit is that his operating costs have increased. According to Paul “Utility rates have gone up” as well as commodity prices for basic food produce. Energy costs have increased steadily and water will only worsen due to the drought year.  Paul also pointed out that it is harder for small “mom and pop” businesses because “we don’t get the utility tax breaks like the big companies.”

The government has tried to make access to capital easier to stimulate the economy by keeping the federal funds rate near 0%.  If Paul has plans to expand then the question of access to capital through loans becomes relevant except contrary to the capitalist business model of continuous expansion Paul states: “I’m not looking to expand – but bank loans have high interest rates; so I’m holding back to invest.” His response may suggest that government policy meant to help the economy is maladjusted to helping small businesses.

Paul had found that his weekday clientele was down “50-60%” which he saw as the loss of working customers on lunch breaks due to the downsizing and disappearance of small businesses on Washington Blvd a few blocks away. “I know my customers, some were staff at the SEIU Union, I don’t see them anymore.” Paul knows he has a reliable core of customers that are USC students “I’m still busy Friday, Saturday, Sunday from the students still coming but it’s the business and maybe the local schools downsizing.” In fact it’s been a year of downsizing and pay freezes for the L.A. Unified School district.

New competition isn’t a problem either – “we are a neighborhood café not a ‘gourmet’ café,” referring to the “Nature’s Brew” café which opened up last year on S. Union Ave. Asking Paul what changes he might have to make he said “I don’t want to raise prices – when I’ve tried doing specials it doesn’t change the number of people coming in.” On the changing nature of downtown Paul replied that “23^rd street is too far to feel the downtown revival…” and on USC’s impact on the neighborhood: “this is a low-income area and USC is creating their own market, only big companies are willing to pay into it” referring to the commercial spaces made available to by new housing constructions and the plans to renovate the University Village. Indeed rent for most of those spaces is in the ballpark of $10 per square foot while rent is about 2$ in older buildings that house local businesses.

The outlook isn’t entirely grim though as social media has been a source of new customers for Paul’s restaurant. “What really helps me are reviews on Yelp, I’m getting tourists from the science center and museums, even people going to LA Live.” Indeed the 23^rd St Café gets 4/5 stars on Yelp. For Paul, this success is due to something the franchises don’t have: “I have specialty food – so I have a loyal following.”

Rice and cigarettes. The first one I enjoy, but the second not so much. Well actually that’s not true; I enjoy both, but truly do want to stub my nicotine addiction. Rice has always been an integral food product in my life. Growing up, I ate bowls after bowls without ever thinking twice about how much rice was available. It wasn’t until a bit over a year ago my mother cautioned me to not eat so much rice. Apparently, rice now became a financial concern within my mother’s grocery budget. This shook me, but I ignored it. It wasn’t a problem doing so since my mother never brought it up again.

 

Looking back on that incident, I compared the price of rice through the years and noticed that there was a steep increase from a consistent average from (US Long Grain) 2007-2012 at 550/ pound to almost 610 a pound at 2013. This explains why my mother was concerned over the price of our rice. Since then, the price has remained in the 600’s averaging around 600.

Now for cigarettes (not proud of this, but). I remember the first time I bought a pack in my sophomore year at high school. It was under 5 bucks for a pack of reds. Since 2011, I’ve been a pack-a-day guy with a minimum wage job. But, if a person has asked me for a cigarette, I would give it to him. There was this universal smoker’s code of giving a cigarette in order to feel better about asking someone when I was in the same situation. I was at peace with this code within that time, but it wasn’t until the past year when I abandoned this karmatic practice. Why? Well, cigarettes have constantly been increasing in price and there came a point when my usual pack of cigarettes jumped 2 dollars within a year. That was it. I didn’t stop smoking but I did stop sharing my smokes with others.  Looking at a cigarette price index, it is evident that this change in price was due to a combination of increased spending on advertising for cigarettes as well as the actions of health organizations to minimize the use of cigarettes. Health organizations convinced government to raise taxes by 10% in order to reduce cigarette consumption.

 

I am not the only one guilty of breaking this code. Many of my smoking peers and strangers have been resilient in their effort to bum their cigarettes as they too have noticed the sharp increase in cigarettes. It is almost as if the new code is to never ask to bum a cigarette.

For Price Agah, being the co-owner of a local pizza place was never something she envisioned herself being at an early age, but sometimes there are opportunities that cannot be pushed away. In her case, it was the combination of her brother and her husband (whom she co-owns Pizzanista with) coming together with an idea for a Pizza place in downtown Los Angeles. And with the combination of luck and good timing on their side, the owners of Pizzanista have established a successful (and delicious) pizza place on the edge of downtown Los Angeles in the Arts District.

One of the main reasons that Price attributes to their success is the fact that the downtown Los Angeles neighborhood is growing and expanding at a rapid rate that has seen many “20 to 30 year old people like us” move into the neighborhood, according to Price and her husband who also live in the neighborhood. However, being a small business owner is not as easy as it has sounded so far, especially in the state of California. In terms of the most challenging aspects of being a small business owner, Price was not shy in declaring her frustration with the figurative “red-tape” that state and city government policies have put in place. When asked about the challenges facing her business that keeps her up at night Price said “I would say that, by far, the biggest challenge of being a small business owner in Los Angeles, well California in general, is dealing with the egregious bureaucracy on a city and state level”. She went on to describe the hurdles and hindrances they have to go through on a yearly basis in terms of the afore mentioned “red-tape” that makes owning a small business in California a “tedious and prohibitive” challenge, according to Price. Perhaps some of her frustration comes from the fact that she mentioned how long it is taking for them to obtain a beer and win license, let alone a liquor license, which is something the owners have strived for since opening in 2010. The other challenges that Price and the Pizzanista team voiced were the normal wear and tear of owning a restaurant, such as management, human resources, training, and turnover of employees.

As with all businesses, there are periods of time where you can encounter ups and downs that are just the natural consequences of the business cycle. However, Price did mention how business for them has not seen extreme dips in demand as she explains that “Pizzanista is lucky in the sense that we are in the food business, and everyone needs to eat!” All jokes aside, there is some truth to that statement, as she cleverly points out that “if we were selling a luxury or niche-product, we might notice consumers cutting back on spending”. An interesting perspective that brings light to her idea that everyone needs food, so demand for their pizza should remain steady if their quality stays at the same level. In terms of seasonal issues with the restaurant, Price explained how Pizzanista usually sees a decrease in sales during the beginning of each month. At first, I found this point a bit perplexing before she went on to explain that “we experience a very light, but still noticeable, decrease in business at the beginning of each month, when most people have to pay rent and other bills.” Not surprisingly, she noted that another dip in demand that they usually face is in August because of the higher temperatures and because their clientele tend to be on vacation during that month.

The last major topic we discussed during the interview concerned the constant fluctuation of prices in terms of their ingredients and the produce they buy. I found it very interesting that on a day by day basis, Price mentioned that “every week they receive updates from our different vendors regarding pricing, and we try to stay abreast of any conditions that affect produce prices.” She added that they try to buy their produce solely from California farmers, but that sometimes specific produce items are unavailable due to factors that are out of their control (e.g. pests, weather, drought etc.) Another obstacle Pizzanista faces is that at the restaurant they have a set menu, which occasionally forces them to buy produce from further away, and sometimes abroad. That being said, Price explains their reluctance to do this because “when we are forced to buy produce outside of California, we normally buy products from Mexico or Central America, which usually come with a higher price tag because of transportation costs.”

Despite the day to day fluctuations of produce, I found the most interesting aspect of this interview was how emotional and passionate Price Agah felt about being a small business owner in the state of California and in Los Angeles and what a “tedious” and “hindrance” the local and state governments can be to small businesses. Perhaps Price is one of many frustrated small business owners who are tired of dealing with the Californian bureaucracy with all of the red tape. Although it was not directly mentioned during our interview, Price and Pizzanista might just move to a more business friendly environment, along with many other business owners, to Texas, which happens to be her home state.

When Susanna Jang, the owner of Tips To Toes salon in south Los Angeles, started her business in 2004, she could depend on customers to call for an appointment.

But with a nail salon on every corner, she said customers have become “spoiled,” and no longer stick to appointments or even make them at all. Now, when they do call, it’s to ask about pricing, and if they end up coming in, they request a cheaper service such as a polish change versus a manicure.

“I lose the most customers when it’s busy and they don’t want to wait,” Jang said. “It used to be that more people made appointments, but now customers expect to come in and be served right away.”

Jang, who moved from Korea in 1990, cannot afford to lose any business. But she says it is hard to predict when the salon will fill up if customers think they no longer have to call in advance.

In addition to manicures and pedicures, Tips To Toes on Figueroa Street offers other beauty treatments such as facials and waxing. The salon attracts most of its business from students at the nearby University of Southern California, and for the first time in ten years, Jang said she is unable to predict the busy cycles.

“Before, I always knew that during the midterm and finals seasons, I would have no customers. The busy seasons were before spring break, back to school and sorority rush. I would always have more people working Thursday and Friday before the weekends, but I can’t read customers’ minds anymore,” Jang said.

For this reason, Jang said she thinks secular rather than cyclical shifts affect the salon more. But the recession and the government shutdown, as well as the abundance of cheap nail salons, have taken a toll on her profits. She said that after the 16-day-long shutdown in October, she lost 40 percent of her customers in the area.

“Because people were laid off, it made them think they should be careful,” she said.

In 2006, the housing costs reached a peak in Southern California and Jang saw a boom of customers. “They must have thought they had a lot since the value of their homes had gone up,” she said. But then, after the bubble burst and prices fell in 2007, the swell of business dried up. “Some people came regularly, but when we heard they were looking for a place to live, they stopped coming.” The other businesses in the same office plaza have struggled too: “there was an acupuncture place next door that was doing good business before the economy went bad, but they had to move two years ago,” Jang said.

Jang has had to contend with salons that offer increasingly lower prices for the same services.

“I think what I charge is pretty standard,” she said ($16 manicure, $21 pedicure). “I don’t know how they can survive that way, unless the owners have husbands or someone to support them.”

Indeed, Jang’s hunch may be correct. Some salons set their prices so low that they cannot maintain a healthy business. Last summer, ABC News reported on a 20/20 investigation that revealed that many salons are unsanitary. In California, investigators found tuberculosis-related bacteria in 16 of the 18 spas they checked. According to an expert in salon-related infections aiding the investigation, competition is so high that discount salons may skimp on skilled technicians and high-quality disinfectant to keep their prices low.

In 2009, TIME magazine reported that nail salons nationwide took a 25 percent revenue plunge. During the recession, Jang lost business slowly, since she maintained a base of regular customers from USC. But she said that up until four years ago, she never got phone calls about prices.

Jang plans on keeping the prices on the basics the same, but is considering raising the cost of “extras” such as gel manicures. The reason she has not done this already is because it is difficult for her to attract new customers and she knows the regular ones are willing to pay the current amount. “They care about service, not prices,” she said. When she first opened Tips To Toes, Jang offered a discount in the Daily Trojan for a free tenth visit. But only her regulars benefitted. Now, Jang relies on word of mouth and tries “not to hire beginners,” to keep the quality of her service.

The recession may have affected business in another way: worried about job security after graduation, USC students may have put in more time at the library rather than attending parties, thus creating less of a demand for professional beauty care.

“The girls that come in look tired and like they’re under more stress in the past five years,” Jung said.

But on the other had, a salon visit can also serve as a way to recharge, which is the reason Jung remains optimistic about the future of Tips To Toes.

“The salon is different from a place like Blockbusters (a video rental chain that closed in the U.S.). You feel positive because people come in to relieve stress. It’s a human-to-human service.”