My December 17, 2014 column from the Nashua Telegraph……………….Villa Banca Closes

It was very sad to see Villa Banca abruptly close its doors in downtown Nashua a few weeks ago. We can only hope that a new occupant will arrive on the scene who can add some energy to a downtown that has absorbed more than its fair share of body blows during the last couple of years. So what happened to Villa Banca?
Obviously I do not know specifically what led to its demise. However, there are a number of reasons that downtown stores and restaurants continue to struggle. First, it is hard for an entrepreneur, imbued with the intellectual and emotional energy of starting a business, to come to grips with just how difficult that challenge can be. It takes stamina, and lots of it. It requires energy and the ability to work long hours. But it also requires financial stamina.
In my experience, it takes roughly three years for a new business to gain traction in the marketplace. During that time very few customers just walk in the front door, especially on Main Street. They need to be given a reason to come. Maybe the place looks interesting and unique to passersby. Maybe an advertisement got their attention. Maybe they were friends of the owner. Maybe it was word of mouth. The point is that something draws them to the business. Few wander in unsolicited.
If in three years the business is still alive, enough repeat business will have been generated to sustain the enterprise. That means that the business must have enough capital to sustain itself during that difficult three year period. We see so many small businesses open and close on Main Street within a relatively short period of time. Often the reason is a simple one. They are undercapitalized.
So how do we explain Villa Banca, which certainly had a following and a good reputation for a number of years? Unlike Aubuchon Hardware, whose closing constituted another blow to Nashua’s downtown this year, Villa Banca was locally owned. It was not a casualty of corporate restructuring. Obviously, it did not have enough customers for the owners to justify keeping it open. But why was that the case?
I suspect that Villa Banca, like many closely owned businesses, may have fallen victim to the shrinking middle class in America. Economic study after study has demonstrated that the purchasing power of what we think of as the middle class in America has shrunk, and is continuing to shrink. There are simply fewer patrons able to visit Villa Banca regularly enough to permit it to sustain itself and grow. Folks can afford Applebee’s or Chile’s, but they cannot afford Villa Banca. It is the new reality.
I know I see in my law practice that my small business clients are, with a couple of exceptions, merely treading water. For most there are no significant growth plans on the horizon. Few of them are contemplating acquiring a competitor, or buying a building. Few of them are doing very much hiring. Most are not making much more money than they were ten years ago. From all of that one can fairly easily deduce that if anything, these same folks are eating at restaurants like Villa Banca less often these days. The middle class is getting squeezed.
I have neither the inclination nor the time here to get into a political discussion about which party is to blame for this predicament. Truthfully, I swore off allegiance to either one of them some time ago. I am curious to see, however, which party might recognize the plight of the middle class and actually come after its votes in the 2016 Presidential election.
Up to now, the Republicans efforts on tax relief have focused on big business and the wealthy. It seems pretty clear that the benefit of those tax cuts have failed to trickle down far enough. Will the Republicans shift gears and propose some substantive tax relief for the middle class? I think it would win votes. Could it not be justified on economic grounds?
As for the Democrats, their major legislative achievement during their time in control of the White House and at least one branch of Congress was health care reform. I appreciate their efforts. I understand clearly that health care was in the process of swallowing our economy. Who knows, in time it might even prove to have been the right choice. But has it helped the plight of the middle class? If the evidence is in, I have yet to see it. So I have the same question for the Democrats. The middle class is ripe for the picking. Will you be the party that offers it substantive tax relief so its plight improves? Would that sort of legislation not be good for the economy, and generate votes at the same time?
I guess only time will tell whether either party will have the common sense to leap to the defense of the middle class. Until one of them does, however, it will continue to be tough sledding for this vital population group, and for our Main Street businesses that serve them. In Nashua, we have the Broad Street Parkway on the horizon. Let’s hope its arrival breathes some additional life into our downtown community.

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