Kennard Herring, an optometrist on Germantown Avenue near Chestnut Hill, runs an eyeglass business that has boomed during the pandemic. But Chris Scott, a Philadelphia gym operator and real estate entrepreneur, has struggled to keep his businesses open.
They’re representative of how Greater Philly’s small-business owners are pivoting and paddling furiously to stay afloat in the midst of a once-in-a-century pandemic. Some found new ways of making money, especially online. Others switched from for-profit to nonprofit structures just to stay alive on grants. And some closed down altogether.
“Everyone is having the kitchen table conversation of whether we pack it up or keep going,” said Donavan West, former head of the African American Chamber of Commerce, who recently started the Black Business Accelerator and began consulting for Black-owned small businesses.
About half of all U.S. small businesses surveyed said they could hang on for less than a year in the current business climate before permanently closing. That’s according to a new poll taken Oct. 30 — Nov. 10 by the U.S. Chamber of Commerce and MetLife.
Amid a new surge in COVID-19 cases and the arrival of the first vaccine doses, most (62%) small businesses fear that the worst is still to come from the virus’ economic impact, and three-quarters (74%) of all small-business owners said they need more government assistance to survive. That number is 81% among minority-owned businesses. Only four in 10 (40%) of all small-business owners surveyed believe their business can keep operating without having to close permanently.
The coronavirus “continues to take a devastating toll on America’s small businesses,” said Neil Bradley, chief policy officer at the U.S. Chamber of Commerce.
Herring, who owns Nostalgic Eye Care and is a graduate of Goldman Sachs’ 10,000 Small Businesses program, has weathered the pandemic by continuing to stay open and serving patients in need of emergency care.
“Most eye care facilities were closed and we were able to increase our patient base due to the fact that we remained open,” he said. “We went above and beyond to provide a safe environment for our patients during the pandemic which allowed them to feel comfortable during their visit.” In April 2020, “we struggled tremendously as many businesses did. But in May business returned back to normal and we have been busy ever since.”
Chris Scott, however, had to close his new gym on Erie and Germantown Avenues after the city ordered indoor fitness facilities to shutter. “It was literally in the heart of Temple’s campus with high foot traffic. We tried to stay open but weren’t able to,” he said.
Scott also runs a real estate firm and a cleaning business. “We lost some cleaning contracts and had to innovate to push through COVID. But people still need to sanitize, so we’re trying to revamp our approach,” he said. His rental properties’ revenues have stayed roughly flat between 2019 and 2020.
“At this stage in my life, quitting is not on the table,” he said.
Michelle Snow had to switch corporate structures completely.
“I ran the Michelle Snow Company with the culture of people over profit. It’s not always the smartest business decision. It keeps customers happy,” she said.
She runs a business consultancy offering coaching and networking, and leadership training for schools and corporations.
“We took a hit. I had to ask myself, ‘Does what we’re selling even matter?’ People still need marketing, how to do their messaging, how do we grow and find traffic? Those things haven’t changed — it’s just how.”
She kept her office at 15th and Walnut Streets, but opened as a nonprofit to apply for grants and small-business loans.
“We had to find other income sources. Instead of just traditional sales or service, we pivoted to grants, scholarships and awards. That was refreshing. But for the pandemic, we wouldn’t have forced ourselves to pivot,” Snow said.
In 2019, business coaching was so competitive, ”we were losing money,” she said. “We went into the pandemic not in a good place. Now that we’re coming out of 2020, we’ve hit six figures in revenue.”
Why keep a physical presence? “I have to have an office, when other partners and Google searchers look for us, we have to show professionalism,” she said. “We can’t throw away our office site.”
Temple student help
Temple University’s Institute for Business and Information Technology began offering free digital services in March to almost 50 small businesses and nonprofits, including website design, a digital storefront, an e-commerce store, and more.
“With the skills we honed from working with the Temple team, we were able to get our site up and running in time for the holiday shopping rush,” said Cindy Ray, co-owner of Urban Princess Boutique, a specialty gift and fashion store on South Street.
“We are actually thriving right now, due in part to the process we underwent working with Temple, who helped us focus and define our goals. We were really working in the dark and wallowing around with no set direction prior to their assistance.”
Prior to the pandemic, Urban Princess Boutique had no digital presence. In addition to their e-commerce store, the business now hosts weekly Facebook Live videos every Wednesday from 6:00-7:00 p.m.
Merzbacher’s, an old-school bakery located in Philadelphia’s Germantown neighborhood, added an online store and now sells to customers directly.
“The e-store has allowed us to add a new source of revenue,” said owns Peter Merzbacher. “Historically, Merzbacher’s revenue has come entirely from business-to-business channels. Because of the website that Temple students built for us, we are selling bread directly to the consumer.”
To sign up, visit: https://ibit.temple.edu/dt/.
Small Business Majority founder and CEO John Arensmeyer said a bipartisan economic relief plan and comprehensive stimulus package for small businesses can’t come soon enough.
As of Thursday night, Congress was closing in on a bill which could include an additional $300 a week in state unemployment insurance recipients for 16 weeks, $300 billion for small businesses, including another round of the Paycheck Protection Program, plus $35 billion for health-care providers, $25 billion for emergency rental assistance to needy families, and $82 billion for schools.
“We support this as a temporary fix to stem further losses during this critical time,” Arensmeyer said in a statement. “The months of congressional inaction have already proven to be detrimental as small businesses continue to face layoffs, permanent closures and financial ruin with mounting debt. Hundreds of thousands of small businesses have closed their doors for good, and a staggering 1-in-3 small businesses, including 41% of Black and Latino-owned businesses, report they will be forced to permanently close their businesses soon without additional relief.”
Cut costs whenever possible and run lean, advises Maura Shenker, director of Temple’s Small Business Development Center.
Try to negotiate with landlords to share the risk and charge tenants only the percentage of occupancy legally allowed (if Philly is at 50% occupancy, only 50% of the rent is owed, for example.)
Join with other small-business owners to brand and package items that go together, such as wine and cheese.
Pivot from experience to product. Chefs or restaurateurs are making products to sell as packaged goods.
Don’t go deeper into debt! Beware loans and scams. Look for grants and other assistance from government and corporate programs.