Stephanie Horne admits to some sleepless nights after deciding to expand her Milwaukee, Wisconsin, women’s clothing boutique, but she knew she had a rare opportunity.

Horne opened a new Stephanie Horne store at Bayshore Town Center in Glendale, Wisconsin, in April and will open a third store at Mayfair Mall in Wauwatosa, Wisconsin, in September.

“It’s a good time to expand simply because rent is more affordable, and if you can tie up a lower rent for a couple of years, it’s definitely to your advantage,” she said.

While some small businesses struggle to stay open during the recession, others have found opportunities to expand. Some said the recession made real estate more affordable and easy to find, while others say they couldn’t let the recession stall their growth plans. Nationally, loan guarantee programs are helping small-business owners expand.

Lori and Joe Lester, owners of Divino Gelato Café in downtown Waukesha, Wisconsin, have expanded twice during the current recession.

Lori Lester, a former residential real estate agent, bought Divino Gelato in May 2007 and took over another existing gelato business in Pewaukee, Wisconsin, in June 2008. She and her husband saw an opportunity to bring an old-fashioned ice-cream store to downtown Waukesha and opened Sloppy Joe’s Soda Fountain in late July.

Sloppy Joe’s serves 16 flavors of homemade ice cream and traditional soda-fountain fare like shakes and malts as well as sloppy-joe sandwiches and hot dogs.

The recession hasn’t affected the businesses because both are destinations and offer moderately priced items, Lori Lester said.

“People can come, they can eat a meal for under $10 and have a blast,” she said.

Lori Lester originally sought to open a second gelato business in Florida, where she and her husband own homes, but could not get a small-business loan to finance the venture. They originally bought the Pewaukee business intending to move the equipment to Florida, but decided to keep it open when those plans fell through.

The Lesters have financed both expansions with proceeds from the existing businesses.

Opening an ice-cream business made economic sense, because the same equipment that makes gelato can make ice cream, Lori Lester said. The two businesses are close enough that the owners can easily work at both.

While Divino Gelato is popular, Joe Lester said the majority of U.S. consumers have never heard of or tried gelato. The Lesters thought someone else would see an opportunity to open an old-fashioned soda fountain in the growing downtown area, so “we decided to compete against ourselves,” he said.

Chris Leffler had already acquired the land to expand Leff’s Lucky Town, a bar and grill, when he saw a significant drop in business in the fourth quarter of 2008. He decided to move forward anyway.

“We could have waited, but I think really our mind was set,” he said.

Leffler bought the adjoining service station in 2008. The expansion was finished in July and added 1,200 square feet of interior space and a 900-square-foot patio with seating.

While the recession gave him pause, Leffler also knew expanding would create opportunities for growth. The bar would have outdoor seating and more room on the inside, where patrons complained they couldn’t find seats on busy nights. He also could improve the outdated bathrooms and have a nonsmoking area.

“It’s a much different atmosphere, and it’s been a tremendous improvement,” he said.

Leffler got loans from the Wauwatosa Revolving Loan Fund Corp. and Town Bank to finance the roughly $750,000 expansion.

Business is increasing, but Leffler said the bar has experienced some growing pains.

Horne views the expansion of her boutique as a bit of an experiment.

“We’re trying to find out if we can survive in a mall,” she said.

A small business considering expansion during the recession should know its customer base and be confident in its product, Horne said.

“I feel it’s all about understanding who your customer is and whether your product offering is still going to be something people want in a down economy,” she said.

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Kathy Bergstrom writes for the Milwaukee Business Journal.