Toronto

'No regrets': New businesses are opening during COVID-19 pandemic — without government help

As COVID-19 restrictions have forced many businesses to close, some entrepreneurs have decided to open new ventures in the past 10 months. But unlike businesses that opened pre-pandemic and are struggling, they're not eligible government financial support.

Thousands of new businesses registered, but are not eligible for pandemic wage, rent relief

Mira Vuletic says she has 'no regrets' about opening a business during the pandemic. (Mira Vuletic)

When the COVID-19 pandemic started taking hold in Canada last spring, Mira Vuletic was preparing to open The REplace, her eco-friendly and package-free general store on Toronto's Danforth Avenue. 

Vuletic, a first-time business owner, had already invested plenty of time, effort and money. But her opening date was still far enough away that she could bail on the project without more serious losses.

It was a fish-or-cut-bait moment.

"When the pandemic hit, I had a small window to turn around and walk away from this," Vuletic said in an interview.

In the end, she decided to forge ahead. For Vuletic, the environmental focus of the store and the waste-reduction effort it contributes to was too important to abandon.

"When climate change effects truly hit, there's not going to be social distancing or quarantine that's going to protect my family or your family. So I said, 'I'm going to do something about this.'"

Delays, uncertainty

Still, it wasn't easy. Construction delays caused by the pandemic pushed back the shop's opening to October. At times, even the customers doubted her.

"This guy was like 'You're opening up during COVID and you don't have paper cups? You're never going to survive!'" she recalled.

Although Vuletic has noticed sales dipping by about 50 per cent since the province-wide lockdown came into effect, the shop is surviving. 

The tap wall at The RePlace, which opened during the pandemic. Mira Vuletic's eco-friendly general store sells detergent, shampoos and other household products in bulk and customers bring their own reusable containers. (Grant Linton/CBC)

Fortunately, it serves coffee and snacks. Originally included as a way to introduce customers to the store, in a stroke of luck, the coffee bar has allowed it to stay open under Ontario's lockdown regulations because it serves food.

"We've had so many customers come in and say, 'Way to go, you're doing something.' This community has needed a shop like this for a long time," Vuletic said.

New businesses up

As COVID-19 restrictions have forced many businesses to close, Vuletic is part of a substantial group of entrepreneurs who have decided to open new ventures in the past 10 months.

According to Ownr, an online business formation service, between March 2020 and the end of January 2021, the company registered 16,000 new Canadian businesses on its platform. In Ontario alone, it registered more than 11,000 new businesses. Overall, Ownr saw a 67 per cent increase in registrations in 2020, compared to 2019.

While much attention is rightfully given to the struggles of existing businesses, such as restaurants, Ownr co-founder Shadi McIsaac says the pandemic has created some positive circumstances for new ventures to launch.

Shadi McIsaac is the co-founder of Ownr. The online business formation service saw more new businesses registered in 2020 than 2019 (CBC)

She points to growth in fields such as e-commerce and health-care products and believes people are seizing on opportunities there. As well, closures and layoffs caused by the pandemic may also be leading former employees to start their own businesses.

"You can almost see a need opening up for people to turn into entrepreneurs to support themselves," McIsaac said. "From that lens, I don't think the volumes are surprising."

Not eligible for government subsidies

Jim Syrbos is the co-owner of East Toronto Coffee Co., a cafe near Main Street and Danforth Avenue that also opened mid-pandemic.

Like Vuletic, Syrbos faced construction delays and the business launched six months later than planned. 

"Opening up during a time of restrictions we've never seen before was super difficult," he said.

East Toronto Coffee Co. opened during the pandemic. Co-owner Jim Syrbos is disappointed that he's not eligible for government assistance. He also says Internet providers aren't giving small business owners enough breaks during the pandemic. (Grant Linton/CBC)

But Syrbos says the response in the community has been "phenomenal" and the cafe quickly gained a loyal following.

While it has exceeded early revenue expectations, Syrbos is disappointed that new businesses aren't eligible for government supports offered during the pandemic. After all, he says new businesses are taking some major risks.

"We're not eligible for wage subsidy, rent relief or anything of that nature. We missed the cut-off. That one definitely hurts us," Syrbos said in an interview.

In order to qualify for government benefits, businesses must be able to prove losses in revenue caused by the pandemic. But new businesses have no pre-pandemic accounting with which  to compare this year's sales.

Even without the government assistance offered to older businesses, Syrbos fully expects the cafe to pull through the pandemic. He looks forward to the return to indoor dining and more amiable interactions with customers.

"It's tough to remember the customers who come in, when everyone is wearing a mask," Syrbos said.

At The REPlace, Mira Vuletic is also looking forward to serving her community even more post-pandemic. And despite the mid-pandemic struggles, she's glad she decided to open up.

"No regrets," she said. "None at all."

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