By: First Union | Date:
How Several Small Businesses Have Been Surviving
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Throughout the past few months, horror stories about what small businesses have had to endure have made headlines across the nation. We've seen numerous shutdowns—permanent ones. And we've seen owners struggling just to figure out a game plan to stay afloat.
Now, as things are starting to stabilize somewhat in a few parts of the country, there are those business owners out there who are managing to find ways in which to ramp up their businesses, in the hopes that they don't have to shut down again.
One such example: New York-based Ovenly—a retail and wholesale bakery co-founded by CEO by Agatha Kulaga. In the initial phase of the pandemic, Ovenly was forced to shutter operations for seven weeks—certainly not an easy thing to withstand or come back from. With over sixty employees, the company had the undesirable task of laying off all of them. They had no choice; it was all about simply trying to survive.
The company has since reopened, but much slower than they'd hoped. To date, they've managed to rehire 8 of their full-time employees and eighteen part-time. Kulaga is intent on keeping things lean for a while, as everything is still relatively shaky and uncertain. On the retail end of things, Ovenly has integrated contactless transactions and has also set up to go windows in the interest of public and staff safety.
It truly is all about how a company adapts at this point. Pivoting is essential. Identifying new ways of bringing in income and finding otherwise unthought-of opportunities could mean the difference between a business making it through this or having to shut down for good. This has been Ovenly's strategy thus far—embrace the challenges by unearthing new ways of generating a revenue stream.
Such was also the strategy of Bow & Arrow Brewing Company based in New Mexico. Owner and CEO Shyla Sheppard understood the need to pivot and do so quickly.
Before the start of the pandemic, the brewing company brought in the bulk of their money from its taproom. Customers came quite steadily to sample and purchase the business's beer and other such products. Obviously, amid lockdowns, this was no longer a viable income channel. They had to figure out how to switch things up or risk losing everything.
Sheppard and company then moved to take out products that helped sustain them during the more difficult periods of the pandemic. They have since opened their outdoor patio to limited capacity. One of the major shifts though the company made was to purchase a canning line. Through this line, they've designed new labels, commissioned new products, and have subsequently launched two brands of canned beer. They were hugely successful; in fact, so successful that they initially sold out and Sheppard is now scurrying to keep up with public demand.
There are also those business owners who were just getting started before everything turned upside down. Seemore Meats and Veggies based in Brooklyn had launched in February. Helmed by Erin Patinkin, the company was counting on over one million in Series A funding when the stock market took a nosedive. That said, Patinkin was able to raise money via fundraising efforts. When the market started showing signs of life again, they were able to get additional cash. All told, they recouped roughly eighty percent of what they had been counting on to get up and running.
And now the company seems to be doing quite well, all circumstances considered. Since the beginning of the crisis, they've gained an additional 60+ clients, with more waiting in the wings.
The Role of the PPP
All three CEOs in this situation did use PPP funds to help them weather the brunt of the storm. The PPP, part of the CARES act, was designed to help small business owners who otherwise were looking at closing up for good. The loan was fully forgivable if owners utilized the funds by the stated guidelines—the biggest part of the money had to go toward payroll-related expenses. Initially, they had eight weeks to spend the funds; this was later extended to twenty-four weeks.
For Patinkin, the amount they received was not substantial. The money went toward payroll and rent primarily. According to the CEO, it got utilized fairly quickly.
In Ovenly's case, there is still some of the PPP money left—approximately 40%. They too have used the loan for payroll as well as rent and utilities.
Upon first receiving the loan, Kulaga was worried about what would happen down the road; she thus decided to spend the money slowly and thereby preserve some of the cash. At this point, the firm has until October to get their staffing levels back up to that sixty-plus employee mark. Fortunately, Kulaga gets to go by the amended PPP terms, citing the fact that the first set of forgiveness terms would have been impossible to abide by.
Sheppard also, like the other two, used the funds toward the accepted expenses: payroll and rent. She too is glad that she gets to work within the extended forgiveness timeframe.
So what did these owners learn during this unprecedented world crisis…for all three the most important lesson was the need to be flexible and adapt to the circumstances at hand, regardless of how trying they may be. With every month bringing a new challenge or a new twist, you can't be certain about anything. In some instances, you have to figure out how to just go with the flow.
The other key takeaway for all three: a company is only as healthy as its leader—both physical and mental health. Despite the extreme stress and the grimness of the situation, they had to figure out ways to stay positive and on task, otherwise, the companies would have likely sunk with them.