With a Home Depot coming to Port Orchard, Ace Hardware owner Scott Mclendon says personalized customer service is more important than ever.

While it’s undisputed that small businesses are the backbone of the U.S. economy, every year those businesses find themselves pitted against big corporations. For a family-owned business with a small staff, competition is not only for customers but also for employees lured away by benefits small firms can’t afford.

“Small businesses employ 90 percent of the people but they have the smallest voice,” says Linda Gair, who with her husband, Bruce, owns a retail store in Gig Harbor. “We are fair and honest with our customers. They should feel comfortable.”

That is the kind of philosophy that successful family-owned businesses adopt. Creativity, ability to make decisions on the spot, intimate customer service and a passion for their work — these are the must-have elements of a successful small business. For many of them, community involvement is also integral. The Gairs, for example, use their fine wines shop as part of a lifestyle that includes extensive community service, from city committees and business associations to neighborhood groups.

“We are very involved in the community. If you are a family, you have to be,” said Carolyn Frame, owner of Bainbridge Island-based CFA Northwest Mortgage Professionals, a company that employs 65 people. About 10 percent are family members, including five generations. Just like the Gairs, Carolyn Frame and husband Charlie consider their involvement as part of their work. Charlie is the president of the Bainbridge Chamber of Commerce, among other things, and the couple was recognized last year as the Chamber’s Business Leaders of the Year and won the same recognition from the Business Journal two years ago.

Building community roots raises awareness for potential customers about the business’ ethics, and it may also attract employees who prefer to work in a positive environment over the ability to get retirement plans — often a luxury for family-owned enterprises. At CFA, family members start in entry-level positions and work their way up. Frame said the employment of family is based on the same high expectations as for anyone else. Well, except maybe for a 5-year-old great-grandson, whose job for now is limited to emptying trash cans once a week.

Building customer loyalty often starts with building employee loyalty. Customers do notice when a business has a friendly and positive atmosphere. Frame says businesses that can’t afford various benefits can compensate by finding creative ways to reward employees. Ongoing training, team building, social time such as company picnics can make a difference on an employee’s morale.

As for customer loyalty, small businesses have advantages that big corporations do not: the ability to make decisions quickly and be flexible to meet customer needs. “We have a board of directors that can make decisions immediately…We are flexible and we are dedicated, and we can make a shift very quickly,” Frame said.

Still, many small businesses fold up their tents when the big guys set up theirs. And when it comes to big-box stores like Wal-Mart and Costco, there are plenty of stories of the little guy being sent packing.

When Home Depot opened in Gig Harbor North, speculation arose on how much longer the two Ace Hardware stores will survive. Three years later, they are still there — and one store manager said business is as usual, and no adjustments had to be made to keep loyal customers. But for another hardware shop a few miles away, on the more remote Key Peninsula, the new competition was nothing but bad news, and most of the employees were laid off.

In Port Orchard, Scott McLendon’s popular Ace Hardware may face some stiff competition from the Home Depot slated to open less than a mile away in a couple of years. But McLendon has done a good job of serving his customers and is involved in the local community. He regularly donates to charity auctions and other community activities, as well as employs many younger staff members who might have a difficult time with large corporations like Home Depot or Wal-Mart.

In Poulsbo, after what has become a rather heated community debate, it remains to be seen what will happen when Wal-Mart opens at the Olhava complex. Many are betting that local businesses will continue to enjoy the support of the citizens over what many in Poulsbo view as an evil corporate giant.

Gair acknowledges that she can’t compete with the discount kings like Costco, where markup is extremely low. Nonetheless, she does remain competitive by pricing her wines at the same levels as grocery stores, and often “shops” around to make sure she’s on the mark. But pricing is not always the main attraction for a patron — it’s all in the attitude and the care they receive. And no big-box store can compete with the kind of attention a family-based business has to offer.