By Brandee Gruener
When Durham was told to “stay in place” because of COVID-19, small businesses that relied on face-to-face contact had to pivot and find a way forward. Many shut down temporarily and laid off employees. Online stores launched overnight. Curbside sales became a primary way of doing business. Personal connections transformed into Zoom sessions. Even after reopening, retailers had to get by with restrictions on how many customers could come through the store.
Those in hospitality were especially hard-hit, said Susan Amey, president and CEO of Discover Durham. Her organization reached out to restaurants and retailers early in the crisis to get a sense of how they were affected. Although Amey was careful to say that the response to their survey was too small to be representative, the data they did receive highlighted the devastation. Of 82 businesses, 56% temporarily shut down and 7% expect to close permanently. Eighty-four percent of business owners laid off employees.
Even more concerning, 95% of businesses saw revenues decline more than 20%, and 40% had more than an 80% decline. Discover Durham tried to help by setting up a webpage compiling all the restaurants open for curbside sales and delivery and sharing alternative funding and support for those in hospitality. Though federal funding has helped, traditional loans through the federal Paycheck Protection Program (PPP) have been out of reach for small business owners with little credit history or ability to keep on employees.
“A lot of the small businesses have just not been able to receive aid,” Amey said. “Even for the ones that have, the PPP is not very well-suited for restaurants and the businesses that had to close.”
Nicole Thompson, president and CEO of Downtown Durham Inc. (DDI), heard similar stories among downtown business owners. She and DDI ambassadors walked much quieter streets and talked to folks about how they were doing, all while keeping the sidewalks clean and the grass mowed. Thompson has urged landlords to work with tenants who can’t pay their rent and connected struggling businesses with institutions that could provide funding.
Thompson praised the city for being quick to put out signs for curbside pickup spots in front of downtown establishments. DDI was also working on banners for businesses to advertise that they are open.
Michelle Nelson, director of marketing and communications at the Greater Durham Chamber of Commerce, said they are hosting weekly teleconferences to see how business owners are doing and how they can help. The Chamber hosts webinars to address some of those needs and is working with businesses that can offer their expertise to others.
Some relief has come at the state and local level: the Golden LEAF Foundation is providing loans from state funds, and Duke University announced a $5 million Duke-Durham fund that is in its final phases of distributing funds. Durham City Council authorized the establishment of the Durham Small Business Recovery Fund program for small businesses adversely affected by the COVID-19 pandemic. The fund consists of private money for grants and public funds for loans and is currently $2 million, with $1 million each from Duke University and the City. The fund will be held and administered by the Carolina Small Business Development Fund (CSBDF). The application Process Begins June 18. In May, Mayor Steve Schewel and County Commissioner Wendy Jacobs announced a task force that will devise a plan for various types of businesses to reopen (both Amey and Thompson, as well as Chamber President/CEO Geoff Durham, are on the task force). And in mid-May, City Manager Tom Bonfield proposed a $5 million COVID-19 response and recovery fund, some of which will go to small and disadvantaged businesses, which would be available for use in the coming fiscal year as a part of the city’s budget. It was approved on June 15.
Christopher Gergen, CEO of Forward Cities, has urged city and county officials to fund grants as quickly as possible for small businesses, which often cannot afford to take on more debt. He said that every minute counts when it comes to keeping a business alive.
“Without action, we’re at a real risk of hollowing out our small business economy,” Gergen said. “The $5 million fund is a step in the right direction. To best support Durham’s small business community, it’s going to be imperative to include them in planning how these funds can be best deployed to maximize their short- and long-term benefit.”
To get a sense of how small businesses are weathering COVID-19, we talked to a few winners for Readers’ Favorite New Business from our annual Best of Durham poll:
Frank Pittman is not exactly new to the music instruction business; he ran a studio out of his home for 35 years before opening the Piano Academy of North Carolina in the fall of 2018. He had more than 50 students arriving at the academy each week for group and individual lessons before making the unexpected change to online instruction. The transition has been an unqualified success, with only two adult students dropping out.
“I’m not saying what’s going to happen in the future. No one can tell,” he said. But “as far as the business is concerned, we can still keep going.”
That’s not to say that online instruction hasn’t been interesting. “Well, I get to see lots of wonderful pets. My students from 6 to 60 have pets, and they want to share them,” Pittman laughed. It’s also challenging to direct younger kids with “the wiggles” over a screen. And buffering can get in the way of accurately hearing students play.
At the same time, students are practicing more and progressing faster with so much time at home. Recitals have been a fun experience with families waving “jazz hands” at the end of every performance. And the adults tell Pittman, “Their music study brings them peace. It brings them normalcy.”
Pittman does have worries, though. He does not want to reopen the academy’s doors until schools open theirs. He might even wait until hospitals start allowing visitors.
“We don’t want to put our kids in danger,” Pittman said. “None of us do.”
In November, Tiffany Griffin and Dariel Heron decided to take the leap and launch their candle-making company. Griffin was furloughed during the government shutdown brought on by budget battles in Congress. That “sent the signal the time is now,” Griffin said. “Go figure, I didn’t plan for a pandemic.”
The couple converted their finished basement into a studio and began producing candles made with natural materials and distinctive fragrances honoring black greatness and the black diaspora. For instance, “Kingston” has scents of rum and sugarcane inspired by Jamaica, where Heron’s family is from.
When January rolled around, the couple began having supply chain problems due to the emergence of coronavirus in China. Then they took a huge hit when the spring markets they had invested in were postponed.
With only two owner-employees, the couple found accessing a PPP loan difficult. Griffin believes that grants will be critical to seeing small businesses through this time. “Even if they’re small grants, particularly for makers,
$5,000 can last three months,” she said.
With zero marketing budget, the pair began a social media campaign for direct sales, though Griffin noted that “the Internet is the wild, Wild West on a good day.” A few local stores continue to sell their candles online. They plan to release new scents in June.
Griffin said collaboration is crucial; their company got off to a good start through pro bono consulting by Duke business students. Businesses could pool all kinds of resources, even child care.
“I really think the power of partnership and the power of social capital is the only way we’re going to get through this,” she said.
Meanwhile, Bright Black’s customers say its candles are a comfort, Griffin said. “It’s actually our mission to infuse the world with more light and positivity.”
On Oct. 5, 2019, Crafts & Drafts NC opened its doors on Guess Road, inviting patrons to create something crafty while making conversation over a cold one. Envisioned by Virginia George, the bar offers drafts from North Carolina breweries, plus fun crafts like terrariums, glass etching and leather earrings. George hosted a couple of successful private parties and was excited to begin marketing baby and wedding showers. Then COVID-19 arrived, and George had to think about how to survive.
“I mean, it was devastating,” she said. “I think we’re making 15% to 20% of what we were making when we were open.”
George is grateful she can continue offering curbside sales from the bottle shop and craft menu. She and her husband, Jim, weren’t counting on Crafts & Drafts to pay the bills right out of the gate. Still, she had to let four of five employees go. It was one of the most painful aspects of the crisis, because her staff was like family. One still helps with curbside delivery on a part-time basis. Two are lucky enough to have full-time jobs.
In May, George was approved for a PPP loan. Though helpful, she believes that nationwide mortgage forgiveness is desperately needed. Many small businesses that can’t reopen also can’t pay the rent or a mortgage.
Despite the financial hit, “We can stay closed as long as we need to in order to keep people safe,” George said of the bar’s indoor space. She is encouraged that Durham continues supporting its local businesses by buying gift cards and products.
“The community we have here is amazing and has been hugely supportive of small businesses,” she said.
Jennifer Thornburg considered virtual classes after launching Good Human Dog Training in February 2019, but didn’t think it was the best option for her business. Instead, she met clients in parks and at their homes, and then began shopping for a dog-training facility.
“But oh, my God, I’m so glad I didn’t take that jump,” Thornburg said. She stopped meeting with dog owners out of safety concerns, and the company lost 80% of its revenues. Two other companies she worked for part-time had to postpone classes. She no longer had enough work for a second trainer, who also owned a hair salon.
Plus, she’s had her daughter, Ari Mae, 4, at home since her day care closed. Thornburg found herself trying to plan virtual dog training classes when she could find the time.
Fortunately, Thornburg lives in a two-income household and could “take a little step back” after being relieved of the expense of day care. She also received some paid leave from Paws4ever, the animal welfare nonprofit she works with.
Thornburg plans to look into PPP now that it covers the self-employed. Meanwhile, people stuck at home are starting to notice that their dogs could use more training. She is optimistic about beginning virtual classes and sees the benefit of creating a safety net by diversifying her offerings. She also believes it is possible to maintain social distance outdoors with dogs on 6-foot leashes.
“I can always meet people and be mindful and wear a mask and use hand sanitizer,” Thornburg said. “It’s more, can people afford it?”
Morgan Siegel opened Jeddah’s Tea downtown in the fall. The tearoom was designed to foster conversation and community over steaming hot cups with flavors from countries like Somalia and Senegal. But when her manager reported just $25 of sales one day in mid-March, Siegel made the tough decision to temporarily close the doors.
Soon after, her kids’ schools closed. Jeddah’s Tea initially started as a family business, but Siegel’s marriage ended, and she needed to find a way through as a single mom. Her mother made the decision to fly in from California and take care of the grandchildren so that Siegel could take care of business.
In May, Siegel began selling tea and other merchandise for curbside pickup and delivery. She was also looking to add a line of spices to her offerings. With people home so much, the interest in cooking has grown. “I want to provide the community some really high-quality, fair-trade spices where they can jazz up their dishes,” she said.
The tearoom’s revenues had dropped 55%, and Siegel said it is tough to access loans when she struggled with finances in the past and had no credit history. Fortunately, she was able to bring back three of her six employees after obtaining a PPP loan.
Despite the losses, she isn’t in a rush to reopen. “I’m really happy with the online sales,” Siegel said, “as opposed to people trying to crowd into a small space.”
“Me and so many other business owners are doing the best we can to navigate this situation,” she added. “There’s just so many things that are not definite, so I’m really, really grateful to the community for being so supportive.”