In this pandemic time, running a small business has been a make-it-up-as-they-go-along trial without an end.
The novel coronavirus forced strategic business pivots and the immediate invention of new ways to make money when much of the economy shut down in March.
Work was done in backyards, cramped lofts, even cars. Good lighting, plentiful space and ergonomically correct surroundings became a vague memory. Colleagues had to search for new stores of patience amid child tantrums and barking dogs.
Restaurants, bars and retail operations have been hardest hit since March, according to user data compiled by Yelp Inc., the San Francisco-based review site. Service providers have proved resilient, whether professional such as accountants and lawyers, or general, including plumbers and towing companies, Yelp said.
More than half of small businesses could be in danger of failing if coronavirus-related operating restrictions continue and more government aid isn’t forthcoming, accord to the National Assn. of Independent Business, an advocacy group.
Many firms will keep their doors open because of adaptation, determination and a certain amount of luck. Others face permanent closure because something came up short: money, time, maybe the will to keep going.
Here are some of their stories:
GIVING FINANCIAL GUIDANCE FROM THE DRIVEWAY
As at so many other companies, big and small, Belva Anakwenze, 43, and her four employees have kept Abacus Financial Business Management going from hastily assembled home office spaces at kitchen tables, bedroom nightstands, back porches and the like.
Anakwenze, Abacus’ principal and business manager, has taken appropriately distanced client meetings in the driveway, and so far none of the neighbors in her gated community have complained. Sometimes, it’s in the backyard, as she adjusts to schedules of husband and sons.
She’s made sharp pivots in the past, such as like when Anakwenze changed her client base from professional athletes, who weren’t good at following advice, to entertainment industry talent, including actors, directors, producers and writers. For them and their closely held companies, Abacus handles the day-to-day financial affairs as well as helps them plan and invest.
Anakwenze is still taking on new business, increasing the number of clients by about half, but the entertainment industry’s long shutdown means that many new and old clients haven’t been able to pay yet as restrictions have only just begun to loosen.
It’s a risk, she knows: Profits are down 10% to 15% so far this year, although a small loan from the federal Paycheck Protection Program, designed to help businesses during the pandemic, helped.
“We make money when they make money,” Anakwenze said of her clients.
At the same time, accounting software and other costs have increased. And Anakwenze is paying rent for an office that she hasn’t really used since March. When the lease expired in August, she took the risk of extending it through the end of the year, albeit with declining hopes.
Online messaging with her employees stretches into the wee hours, even though participants are nearby.
“I have an employee working at midnight, because it’s the quiet time; the kids are finally asleep,” Anakwenze said. “I have one putting hours in on weekends, when there’s no home schooling. So, it’s not a weekday, 9 to 5 job. And not being able to just talk to someone at the next desk, that lack of free flowing questions and getting answers, has been a real challenge.”
She’s even gotten used to employees suddenly hanging up on her.
“When their child is having a meltdown, you go deal with the meltdown,” Anakwenze said with a laugh.
“We’re trying to take this thing one month at a time and just see. Is it going to clear up? Is it going to get worse? So, we’re just trying to buy time and stay as nimble as we possibly can,” Anakwenze said.
SWITCHING TO YOGA RETREATS, OUTDOOR DINING BUILD OUTS
Over the past 18 years, Natalie McAdams built Mar Vista-based NAMEvents beyond helping plan product launches, fashion shows and premieres, adding mega-happenings to raise money for nonprofits, including City of Hope, Heal the Bay and U.S. Veterans Initiative housing and service provider.
Each event was a closely packed, in-person affair with up to 10,000 participants. No more.
“No one was thinking it would go past July. But then it was like dominoes, every piece of business that I had was canceled by mid-April,” she said.
McAdams, 56, has had to seek out other ways to make money. She received PPP money, enough to last 12 weeks, which she has been able to use to pay herself because she proved to the government that she was also working as an independent contractor, not just as the head of a company.
McAdams has kept her business lean. She works from home, avoiding overhead for office space. She keeps her payroll low, and isn’t carrying one now because of lessons learned during the Great Recession, which stretched from December 2007 to June 2009.
“Usually it’s me and I’ll bring on a few freelance people to work as my staff,” she said. “There could easily be 50 to 75 people working on a project at any given time. I have trusted partners I use for all the different elements.”
To generate income now, she’s channeled her leisure-hours yoga passion, which she has practiced for more than 20 years, into small, virus-screened retreats using the event planning skills she honed for big social gatherings.
McAdams recently conducted the first of several planned yoga and wellness retreats, with professional instruction and catered meals costing $1,500 to $2,250 a person. Eight women gathered at her parents’ Aspen, Colo., vacation home from a Wednesday night throughSunday, and all involved were screened for the virus.
“I’ve been on thousands of yoga and wellness retreats and I’ve always wanted that to be something I could produce as well,” McAdams said. “The idea was to make a safe space for a small intimate group of people. I think it can give people a sense that they really can get away somewhere safe and just recharge.”
McAdams also has been working with the Beverly Center’s Angler restaurant to create an outdoor dining area.
“It’s similar to the temporary spaces we built for events, but permanent,” she said.
Many of her charity clients are hoping to start holding in-person fundraisers by June, McAdams said.
“There’s still a lot of management things that I’m doing for those events because we’ve put venues on hold. We booked things then which would be into the fall that now we’re moving to the spring,” she said.
But McAdams doubts if it will be the same even after the virus problem has been solved.
“Things will be different,” she said. “I think that people will be doing much smaller events, at least at the beginning.”
MEETING THE VIRTUAL WORLD WITH ACQUIRED ALLIES
The first hint of disaster came on Feb. 3, when a major trade group for event planners told members to check whether their insurance policies covered communicable diseases.
Joe Davy, the 31-year-old chief executive of Banzai International Inc., was concerned. Seattle-based Banzai, which hosted and marketed 66 in-person conferences and other events in the Los Angeles area in 2019, had more than 100 clients, including like Dell Technologies and Adobe Inc.
By March 13, “our entire sales pipeline was gone,” Davy said.
Only 13% of the company’s revenue came from internet meetings, an afterthought at Banzai and many of its competitors, Davy said. The rest were all face-to-face, press-the-flesh, meet-and-greet events.
Not knowing whether in-person gatherings would come back in six months or two years, Davy and his executive team decided not to wait to shift the company’s focus to virtual events. PPP money helped the company keep operating.
But there was a problem: Banzai had little expertise with virtual events and acquired a small company that did, High Attendance of Austin, Texas. “We were really going to have to take a risk, make an acquisition before we were 100% certain that any of this was necessary,” Davy said.
Striking the deal took 72 hours of talks between Davy and Christopher Justice, founder of High Attendance, which began on June 12 and ran through the weekend. The two had never met in person.
The acquisition, for an undisclosed sum, was announced on Aug. 25. High Attendance was renamed Banzai Virtual and it has maintained its management structure. Business for the company has been on the rise, Davy said, and Banzai now has 90 employees, including about 10 from the acquisition.
Banzai’s calendar is heavily booked with virtual events, including for big tech names Google and Hitachi.
“Our volume of events has nearly doubled,” Davy said. “It was really fortunate that we were able to respond so quickly because this could have been a huge disaster for us. If we had done nothing and just decided to wait it out, we would be dead.”
GOING ALL-IN ON REMOTE WORK, MAYBE FOREVER
Greg Goetzman, 58, isn’t much of a gambler, which is probably a good thing because his company helps other firms keep their financial houses in order.
But when the coronavirus sent people home, he quickly placed a bet on a template for the post-COVID 19 workplace: as many as half of his employees regularly working from home and collaborating with the main office.
Woodland Hills-based Goetzman Group, with nearly 100 employees, competes with larger accounting and consulting firms and temp agencies. Goetzman said he realized that he needed to carefully outfit his employees to keep getting the job done, with equipment and systems to connect and communicate safely and effectively.
“When we go into companies, we need to perform from Day 1,” Goetzman said. “So we’ll deploy as many resources as necessary in order to help our people have what they need to be successful with our clients.”
Goetzman didn’t know whether his employees would adjust well to working from home or clients would switch to bigger rivals. But employees and clients have embraced the change, he said.
“I haven’t seen a drop in work quality. I think there’s a real revolution of thought in seeing the value of people working from home,” Goetzman said. “We are fortunate that our consultants are flexible and accustomed to working from different locations, therefore, they were prepared and there were no issues transitioning to working remotely.”
“We are changing the way we do business,” he said. “It’s going to be some blend of working from home and work from the office. We maybe had 20% of our employees working remotely before COVID. It’s closer to 100% now. I think we will end up somewhere in the middle of that.”
Goetzman said his company’s workload was increasing — although revenue is down slightly so far this year — whether his clients were succeeding in getting back to business or struggling to determine if they could remain viable.
These moves have been quite a pivot for Goetzman and his 22-year-old firm. Over the years, his company has built up a list of clients including Amgen, Walt Disney Co. and Toyota. But that was done the old-school way.
“It’s challenging now because there isn’t that personal connection,” Goetzman said. “My company was built on me being able to look somebody in the eye and talk to them about our services and learn about their companies. A phone call or a Zoom just doesn’t feel the same.”
Perhaps that’s why Goetzman says he has returned to an old habit, writing appreciative letters to clients, with an ink pen, in longhand.
“It gets a personal message across in a way that an email or a phone call or a message may not,” he said. “It’s you taking the time to really give some deeper thought to the business relationship and what it means to you.”
(Article written by Ronald D. White)