Small businesses scramble for cash flow in face of COVID-19 closures
Creative solutions needed to keep cash flowing while businesses shut down for COVID-19
With the stresses of the novel coronavirus pandemic, small business owners have the added problem of a reduced cash flow, in many cases having to re-create their business model on the fly to stay afloat.
Theatres, bars, museums, buffet restaurants and gyms are just some of the public spaces the province has advised to shut down.
Glenn Barrington, owner operator of Thunder & Lighning in Sackville, closed his pub on Saturday because he felt it was in the best interest of his staff and patrons.
"You're questioning everything that you're touching and everything you're doing and you know all your interactions with each person," said Barrington.
But like any business, Barrington relies on sales to pay the bills. Without any money coming in, he is offering "pay-it-forward tabs."
He put out a call online for regulars to estimate what they might spend at the pub over the next few weeks, and, if possible they buy a pre-paid tab.
"When we finally reopen everybody has a prepaid tab at the bar, so everybody can finally come out and socialize and, you know, enjoy each other's company for the first time in what could be a while and we're able to stay open."
Barrington said about 30 people have participated so far, and it's amounted to enough to give him some peace of mind for at least a few weeks.
"I don't know how long we can survive"
In Fredericton, Cara Hazelton owner and head teacher at Precision Pilates, had to switch her business model overnight to stay afloat.
In the days leading up to the government-recommended shutdown, she had been following regulations by reducing the number of people in the studio at one time and doing extra cleaning.
With the measures enacted, as of Wednesday morning all of her classes have moved online. She had the basic infrastructure in place, since she has offered private lessons via video feed for a while, "but not on the scale that I'm going to have to do it now."
But Hazelton is worried that while this will keep some money coming in, it won't be enough.
"I don't know how long we can survive."
"I've been in business for 13 years and I've not seen anything like it, I mean my rent isn't going away, my phone bill isn't going away," she said.
Hazelton relies on monthly memberships, and clients who have agreed to continue paying while taking online classes.
"But of course I have a number of clients that are self-employed like me and they're having to pull out of the studio for reasons I totally understand."
'Not sure where my next sales are going be coming from'
Other brick-and-mortar retailers are shifting away from walk-in customers to putting more effort into online sales.
Derrick Dixon said closing up shop wasn't necessary to keep people away. Business dried up at Hounds of Vintage, in Sackville, once nearby Mount Allison University cancelled in-person classes.
"I just sort of decided to follow suit and kind of take the time to focus energy on online sales, since there's not as much foot traffic in town right now," said Dixon.
The door of the shop isn't locked, but customers are coming by appointment-only in order to allow enough room for social distancing inside the store.
"It's pretty stressful, first of all and foremost just because I'm not sure where my next sales are going be coming from."
Dixon said customers have been supportive, and online sales have been strong, "but it's hard to say how that momentum will sustain itself over a longer period of time."
Cara Hazelton said as a small business owner, her days aren't spent at home making crafts with her kids. She's had to reduce staff and is teaching back to back hour-long Pilates classes.
"I'm now working more hours than I've ever had for less money than I've made to try to get ends to come together through this," said Hazelton.
She's doing what she can to keep her business of 13 years running, but she also feels a responsibility to her clients.
"It's really important for all of us to maintain our activity levels and to get exercises to stay healthy because we know that reduces stress and boost our immune systems."
All of these small business owners said they recognize the importance of working together to keep people safe, but financial help will be needed.
"Disaster relief funding is the only thing I can see that's going to help in this situation because otherwise two months from now or three months from now or six months from now when we come out of this, there's not going to be a bar, pub, café, clothing studio, Pilates studio," Hazelton said.
Feds say help in on the way
Wednesday, Prime Minister Justin Trudeau announced an $82 billion aid package to help Canadians and businesses, including income supports, wage subsidies and tax deferrals as a result of the global COVID-19 pandemic.
The program aims to help Canadians pay for rent and groceries, help businesses continue to meet payroll and pay bills, and to stabilize the economy. Supports could start flowing in weeks, Trudeau said.