LOS ANGELES — Heidi and Susie Bauer had a 1970s childhood steeped in crafts.

While their friends in Sherman Oaks were playing sports and going to the mall, the Bauer sisters were encouraged to design their own clothes, toys, gifts and even some of the furniture for their rooms.

Self-sufficiency has served them well. With no commercial design or publishing experience, they started a greeting-card company in 1993, naming it Rock Scissor Paper, after their favorite game as children.

"We had both worked for other people," said Susie Bauer, 39. "But there was something in us that made us want to create something of our own."

Last year, Rock Scissor Paper, based in a Los Angeles warehouse, had $600,000 in sales, and its products — emblazoned with the Bauers' colorful retro designs — made it into 1,100 gift and stationery shops across the U.S.

The Bauers had 11 years of growth before sales flattened in 2005. They see it as part of an industrywide slowdown and are making changes.

They are moving into new products and new ways of marketing their designs. They have introduced a line of pins, spiral-bound notebooks for children and coloring books for adults, featuring architectural and interior design motifs. They have also licensed their artwork for party goods.

But creativity may not be enough. It also takes perseverance for a small player to stay afloat in the $7.5 billion greeting-card industry. As in many businesses, it has become tougher for independents to thrive at a time when mass merchandisers have eclipsed stand-alone retailers.

The card business is also facing an aging customer base.

"Teens and young adults don't have a history of sending something by mail," said Erik Thoresen, an analyst at Mintel International Group, a Chicago market research firm. "It's a tradition that is slipping away."

A 2004 Mintel report forecast that the industry's revenue, adjusted for inflation, would decrease 9.7 percent by 2009.

The two companies that dominate the industry are feeling the pinch. Hallmark Cards Inc. reported sales of $4.2 billion for 2005, down from $4.4 billion the previous year. American Greetings Corp., with $1.9 billion in sales, was also slightly down.

Third-largest was Paramount Cards Inc., based in Rhode Island. But last month it closed down.

The card business is spread among about 3,000 companies, according to the Greeting Card Association. Most are small, and many don't survive longer than five years.

The Bauer sisters, with only three employees, help with shipping and other chores at the warehouse. They also run their retail Web business, which last year accounted for about 22 percent of revenue.

The sisters are used to working as a unit. When they were growing up, they spent plenty of time together creating elaborate toy worlds.

"Our favorite was an entire pet hospital that we made," Heidi Bauer, 36, said, "including a detailed X-ray machine, charts, medical records. Our stuffed animals were the patients."

The two women laugh at the memory. But that period was a difficult time in their lives. For much of their childhood, their mother was in and out of real hospitals, struggling with cancer.

Their mother died in 1979. Their father's death in 1992 helped sparked the creation of their business.

At the time, Susie Bauer was managing a store for women's clothing company Esprit, and Heidi Bauer was a personal assistant to the family of the late singer Roy Orbison.

The sisters have tried to get into nationwide chains, including Target Corp., but their efforts have not been successful.

The Bauers have received occasional offers to sell Rock Scissor Paper to larger firms.

"There are people who take joy in building a business and then selling it," Heidi Bauer said. "But that's not us, at least not right now."

"This is a business that has allowed us to build something, ourselves, and be artists, whether it's making cards or designing a trade show booth," Susie Bauer said. "At this point, we can't imagine what else we might do."