Former business owner overcomes devastating setbacks

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dr.doolittleIf you are in pursuit of the American Dream, you probably weren’t given a roadmap that would guarantee a successful journey. Ask the average man or woman on the street today what immediate thoughts come to mind about owning your own business, and you’ll probably hear, “Being your own boss,” and “Working your own hours.”

However as Donald Russell Jr. found out, when opening your own business becomes the alternative to unemployment in your later years, it may not be what you expected or even planned. Like millions of middle-aged workers in the early 1990s, a severe economic downturn forced the Central Falls resident to make choices that ultimately would financially hit his pocketbook as he approached retirement.

Russell had worked his way up from stock boy to manager at the F.W. Woolworth Co., one of the areas original five-and-dime stores. During his 33-year career with the fourth largest retailer in the world operating over 5,000 stores at the time, he eventually managed seven of the company’s stores, one located in Providence at Westminster and Dorrance streets, and the others in Massachusetts, Vermont and New York.

But everything changed in the late 1990s when the 117-year-old company struggled to compete with the growing big discount stores.  F.W. Woolworth filed for bankruptcy protection, and Russell, facing unemployment, had to quickly make major career decisions.  He knew that, “at age 52, big box competitors don’t want you,” or if he was offered a position, the salary would be much lower than what he was used to. “I could not take less because I had to pay for my daughter’s college education,” he said.

Getting into the Pet Business

Russell credits courses he took at Boston College for teaching him valuable lessons needed to open a small business. He conducted extensive research, looking for a market niche that would not pit him against a chain store. He discovered that the pet business was not really sought by “big box retailers,” and in 1997, opened Dr. Doolittle’s Pets & More in an East Providence shopping plaza. He financed the venture by cashing out his $80,000 pension and combining it with a loan from the U.S. Small Business Administration.

Though situated between two large Petco stores — one in Rumford and the other in North Attleboro — Russell said Dr. Doolittle’s could thrive because his prices were lower than those competitors. Business was strong for 13 years, during which Russell employed seven full- and part-time employees. However by 2004, “the economy began to take a dive” and juggling the monthly rent, utilities and employee salaries became difficult as the cash flow slowed. Russell began to lose money.

In 2006, revenue dropped 30 percent from the previous year, and stores in the same plaza as Dr. Doolittle’s, including Ocean State Job Lot, began to close. He trimmed expenses and was able to negotiate a lower rent, but “losing the Stop & Shop supermarket in the next plaza,” which was a main draw to the area, “was ultimately the straw that broke the camel’s back.”

Taking from Peter to Pay Paul

Like thousands of small business owners in the Ocean State, Russell had to juggle each month to meet his expenses. Choosing to pay his monthly sales taxes or paying his employees salary was not an easy choice to make, but he could not pay both.

“I chose to pay my employees …with the plan to make up my [delinquent] sales tax later” he stated, noting that the “economy put the brakes to that.”

“I could not even borrow a dime even with an excellent credit rating of 750,” Russell said. The poor economy had forced banks to cut off credit to small businesses.

In 2009, the Rhode Island Department of Taxation came knocking on his door, and the now 65-year-old pet store owner was forced to close his business because he was in arrears on his payment of sales taxes, owing thousands of dollars. With his sole source of income gone, he was unable to rescue his business or pay the state. Rather than padlock the doors, state officials allowed him access to the store to care for the animals until other arrangements were made.

Two weeks after his closing, Russell hammered out a payment plan with the state for back taxes. He paid off $18,500 of the $20,000 the state claimed was owed, and disputed the balance that included penalties and interest. Because of the $1,500 balance, the state initially blocked Russell’s attempt to register a motor vehicle. He fought back and was allowed to register the car.

The closure of Dr. Doolittle’s and Russell’s bankruptcy filing caught the attention of the media throughout the country. His plight was fodder for two radio talk shows and television news coverage. Even the popular Drudge Report website posted articles about Russell, who said more than 100 pages of blog postings were also generated.

Making Ends Meet

Today, the 72-year-old Russell is collecting Social Security that is supplemented by a part-time job delivering pizzas. Beneficiaries will not receive cost-of-living increases because of the inaction of Congress. Like millions of seniors on fixed incomes Russell feels the impact of inflation. “There is no extra money to buy groceries after paying my rent and utilities,” he says. Local food pantries provide additional food and the Pawtucket-based Blackstone Valley Community Action Program pays for some of his heating bills.              .

Reflecting on the layoff in his 50s that led to the opening of his small business and ultimately its closing as he reached his mid-60s because of an ailing economy, Russell admits he did not have a strategy for getting through the tough times in his later years.

“I just coped,” says Russell. The former business owner has a strong opinion on opening a small business in Rhode Island. “Never,” he says. .

By Herb Weiss, a Pawtucket-based writer, for Senior Digest. Reach him at hweissri@aol.com.

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