No Small Feat for Small Business—Dealing with Shift in the COVID-19 Landscape
“We all owe 2019 an apology for what we said about it.” ~ unknown source.
While we sit at home in our makeshift home offices, jumping on zoom calls and paddling our way through the global storm that is COVID-19, that quote has never rang truer.
For my small business, Alchemysts Inc. (a Canadian marketing and PR agency), every January is a “reset.” My clients are in the wine, spirits and beer industry so our reprieve from the industry chaos sets in around January 1—once the last of their holiday entertaining campaigns have been put to bed.
Once we’re all back to work in the first couple of weeks of January, the sentiment is always optimistic and excited. I set bigger goals. I make larger, more detailed plans. I refine processes and I get ready to execute a bigger and better year.
However, I can also tell you that I “failed” to plan for a global pandemic in March—one that would pause the entire world.
I, of course, use the word “failed” ironically. Regardless of what was beginning to unfold overseas, I don’t think any of us could have truly predicted the devastating effects COVID-19 would have on the global economy, or how quickly things would change for many of us—especially in early January. I spent the bulk of January in Florida making plans for the U.S. branch of Alchemysts Inc. that was scheduled for this year.
Marketing and public relations has faced an incredible amount of change over the last few years. Half of our media outlets have completely disappeared, and we’ve been balancing our client needs for editorial with P2P (pay-to-play) models that don’t always have the analytics or the ROI we require. But as an agency owner, it’s been my responsibility to adjust and as an agency, we’ve pivoted and evolved accordingly.
COVID-19 however, has been a tougher pill to swallow.
For many of the marketing and PR agencies (particularly those catering to the hospitality, food & beverage, and entertainment industries), mid to late March has resulted in devastating losses. Some agencies have gone from from 50+ clients to 0 within the span of a mere couple of days. Friends of mine with agencies serving the beauty and lifestyle industry have faced the same fate—a shift from a prospering agency at full capacity, to a 100% revenue loss, and huge lay-offs (of part or all of their staff).
The toughest part of all these losses is how quickly things have turned. There hasn’t been a gradual decline that prepared us for losses. We went from thriving to surviving, with little to no control over the situation. Although clearly these losses cannot compare to those losing loved ones to the virus—health and well-being are no doubt the most important part of life in a global pandemic, and otherwise.
The losses for many have been painful regardless. In a group chat I participated in last week, an HR consultant mentioned that some of her small business clients had to lay-off their employees, in which someone responded, “that seems so heartless.”
For small businesses, I argue that this has been anything but a heartless experience—in fact, I can confidently tell you that facing employees and telling them they were indefinitely unemployed while navigating the ever-changing information is nothing short of gut wrenching. Yet necessary, for survival. And, I can undoubtedly confirm this sentiment resounds with many small business owners I have conversed with over emotional calls over the last few weeks.
As the immediate panic of COVID-19 is starting to taper, and we all adjust to the new norm of self-isolation, the priorities of business owners seem to focus on two key factors: survival of the business and employment of staff who are facing temporary lay-offs by the masses.
Luckily, the federal government has begun to roll out programs to support small businesses. The Canada Emergency Wage Subsidy is covering “75% of salaries for qualifying businesses, for up to 3 months, retroactive to March 15, 2020.”
Additionally, the Canada Emergency Business Account provides qualifying small businesses a loan of $40,000 to help with fixed expenses (given they paid over $50,000 in total payroll in 2019). According to my office neighbour and friend Victor Godinho, Partner and Wealth Advisor, Kismet Wealth Corporation, The Canada Emergency Business Account is essentially an interest-free line of credit that is guaranteed by the government and can be used for fixed expenses, like commercial rent.” According to Godinho’s research, if the loan is paid back in full on December 31, 2021, there’s a 25% forgiveness on the balance owing and the remainder of the loan converts to a 3-5 year term loan at a 5% interest rate. It’s debt, but not a bad deal given the circumstances.
Where there has been surprisingly little leniency for small business owners has been from commercial landlords. The consensus seems to be that a global pandemic is no reason for flexibility—business for them is as usual.
As one of the tenants of a property management group with head offices in downtown Toronto, for example, we proactively asked for a rent deferral of 6-months (the deferral amount would be then divided across the remainder of the lease), and we were denied. The response provided was a 30-day leeway for April rent up to April 30th “without pursuing any legal remedies against your company, provided that rent is paid on or before April 30, 2020.” A friend of a friend, who is a tenant of a commercial building at the intersection of King St and Bay St, faced a similar response. Other small business friends have faced harsh one-word demands for rent stating that “it isn’t their problem, and that rent is still due.”
We’re in a time when global spirits groups such as William Grant & Sons and Canadian groups like Central City Brewing are shifting production from spirits and beer to hand sanitizer for healthcare workers, global fashion labels such as Prada are shifting production to masks for frontline workers. And marketing agencies, such as mine, are offering complimentary support and education to small businesses in our industry during the pandemic. It’s no doubt disappointing that commercial landlords are not rising to the occasion to support the survival of small businesses—specifically the service-based businesses that have had to cease operations for the health of the community. Business is business, but in the face of a global pandemic, kindness is a currency that has far larger value.
What has been a light in what has felt like weeks of darkness for many of us, has been the true sense of community that has emerged among small business owners and friends. We call (not text) and share information with each other daily. We vent, we cry, we share quarantine jokes, and we brainstorm on how to support each other. There is true beauty in the pain and I have no doubt this will be an opportunity for growth and innovation for many of us small business owners.
As Richard Branson once said, “an entrepreneur is an innovator, job creator, game-changer, leader, disruptor, [and] adventurer.”
Here’s to toasting our changemaking community.
CEO & Agency Director, Alchemysts Inc.
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