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Published in Small Business
Alysha Lach White, founder of Little Space Studio co-working space in Grand Rapids, says business is slowly ramping back up, though finding financing for an expansion has been difficult.  Alysha Lach White, founder of Little Space Studio co-working space in Grand Rapids, says business is slowly ramping back up, though finding financing for an expansion has been difficult. MIBIZ FILE PHOTO: KATY BATDORFF

SIX MONTHS IN: Small businesses reflect on the ups, downs, optimism and bleakness of the COVID-19 pandemic

BY Sunday, September 13, 2020 05:46pm

In early May, MiBiz began featuring small businesses across Western and Southwestern Michigan in a section called “Coping with COVID-19.” The goal was to tell the stories of small businesses adjusting to the global pandemic and capture their outlook at this historic point in time.

Since then, the section has profiled 51 companies and business owners that — as it turns out — run the full spectrum of the COVID-19 experience. 

MiBiz followed up with some of these businesses at the six-month mark of the pandemic. We’ve heard from concert venues that aren’t sure whether they’ll ever reopen; hospitality and service industry companies that were hanging on by a thread but have adapted to slowly regain a foothold; and thriving manufacturers whose businesses turned out to be pandemic-proof. Many also had a first experience applying for nonprofit grants or government loans to help bridge the financial gap during the massive disruption in the business climate. 

Experts also have shared stories about the mental health toll that comes with running a small business amid such widespread uncertainty. In other cases, entrepreneurs have discussed their renewed commitments to equity as a result of social justice activism. 

A common thread among each of these businesses is a changed long-term outlook and at least some operational and management changes that will stay in place — as well as their lack of a clear sense of any sort of return to normalcy. As the owner of a solar panel manufacturer near Manistee put it: “We’re not out of the woods yet. I really believe we’re going to be on guard for another year.” Others say they won’t fully rebound until 2023.

Meanwhile, COVID-19 is still very much present in the U.S. and Michigan as we’re less than two months out from a — pardon the cliche — consequential presidential election. While hope remains for a widely available COVID-19 vaccine, the region is, indeed, not out of the woods yet.

Bleak future

As business reopenings took on a decidedly partisan nature by late spring, concert venues — where Republicans, Democrats, Independents, anarchists and the apolitical seek respite from the outside world — have remained dark with virtually no timeline for reopening. 

Instead, thousands of independently owned venues across the U.S. banded together to form the National Independent Venue Association (NIVA) and advocate for direct federal stimulus funding. Despite the months-long effort, legislation is stalled in Congress.

Scott Hammontree, partner and talent buyer at The Intersection in Grand Rapids, is a Michigan state captain for NIVA and has taken a lead role in the group’s congressional lobbying effort.

“It’s nothing I’ve ever done before,” Hammontree said. “It’s making (lawmakers) understand that if they don’t act, there’s going to be a big problem here, not just with venues but the trickle down to other businesses.”

The Intersection is no exception to the industry’s pain. Each of the venue’s 70-plus employees — including Hammontree — is on furlough. Much of the venue’s merchandise has already sold. Taking on loans poses a risk, while grants aren’t enough to make a dent in rent and utilities. The emails from bands and booking agents virtually halted, but signal a realistic return in late summer or early fall 2021. 

“It’s bleak, just devastating,” Hammontree said. “I walk into my building every day, and it’s dark.”

Slow recovery

Alysha Lach White, owner and founder of Little Space Studio — a Grand Rapids-based co-working space — is seeing a little light at the end of the tunnel, although financial obstacles remain. The space reopened for customers in early August after successfully launching digital memberships, but it’s having difficulty securing investors to complete renovations on one of the two floors it leases. The additional space would allow the company to create new revenue streams, including with multimedia studios.

“It’s been very interesting trying to raise money during COVID,” Lach White said. “If you’re not a unicorn tech company, people aren’t really interested in investing right now.”

As revenue slowly builds again, Lach White expressed optimism overall about co-working spaces as companies shift to work-from-home models. Employees may be “absolutely miserable” working from home, while she sees opportunity for short-term conference space rentals.

The hotel and lodging industry is also seeing activity recover, although occupancy remains about 50 percent of what it was a year ago.

Peter Beukema, CEO of Hudsonville-based Suburban Inns, said while leisure travel bounced back during the summer, the company is still being hit by a dearth of business travel, conferences and events. 

Suburban Inns, which owns seven hotels in West Michigan, was in “survival mode” and “hanging on by our fingertips” in early May. Staffing reached a low of about 130 people, which has since rebounded to 400, Beukema said. However, he doesn’t expect the hotel industry to return to “normal 2019 levels” until 2022, “if not 2023.”

“We’re slowly re-engaging,” he said. “As we do that, we’re being responsible stewards of not only the business but our team members and their needs.”

‘Hopeful for the future’

Though the inability to work directly with customers at the start of the pandemic and questions over customers’ ability to spend posed challenges early on, Copemish-based solar panel manufacturer CBS Solar has added a new employee and as of September had “pulled even” with last year’s sales, said President and Sales Director Allan O’Shea.

“We are now buried” with accounts, O’Shea said. “I’ve got smiling faces on all the sales commission people and improved cash flow.”

CBS still has social distancing and mask-wearing policies in place, which O’Shea doesn’t expect to waiver over the next year. That aspect of COVID-19 was eye-opening, he said: “We were way too sloppy with the flu and sanitizing and the way we were operating. That’ll never go away, I’m positive of that.”

Grand Rapids-based entrepreneur Jonathan Jelks — who’s part-owner in multiple ventures including an apparel line, a forthcoming downtown lounge and a spirits company — took the past six months to “refocus and further diversify our portfolio.” And it’s paying off, he said.

Motu Viget Spirits has “grown tremendously” and is now available in more than 50 Meijer stores in the region. Online sales for GR Apparel USA Co. have been “through the roof.” And he’s planning more investments in legalized cannabis.

“The economic downturn has just reminded me of how cutthroat entrepreneurship is,” Jelks said. “If you’re a real entrepreneur, you’ve had to prove it. In dealing with these obstacles and challenges, a lot of people have risen to the occasion, and that’s inspiring. I’m really hopeful for the future.” 

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