Mar 18, 2020 - News

Lost revenue and layoffs: Coronavirus crushes Charlotte’s small businesses

Manolo Betancur Manolo's Bakery

Manolo Betancur, owner of Manolo's Latin Bakery, stands in front of the pastries case at his store. Photo courtesy of Joshua Komer

Normally, this is when Manolo Betancur would be slammed with catering orders for weddings, quinceañeras, conferences, and big luncheons.

On a quiet recent morning, Betancur paces his bakery in east Charlotte, donning a black hooded sweatshirt that reads: “Made in America By Immigrant Hands.” One baker puts the finishing touches on a pastel sheet cake. Another, preparing fresh empanadas, gently folds a beef mixture into yellow cornmeal dough.

Betancur wants the community to know that grocery store shelves around town may be fast emptying, but Manolo’s Bakery is still open for business.

As a growing number of coronavirus cases crop up around Mecklenburg County, more large-scale events have canceled. Along with canceled private parties, Betancur has lost catering contracts for the Latin Chamber of Commerce, Kings University, and several field trips. He is supposed to provide meals and snacks to a bilingual school in CMS, too, but the system is off for at least two weeks.

So far, the outbreak has cost Betancur roughly $30,000 in lost revenue. That number, he worries, could easily double if the outbreak keeps shutting events down for more than a few weeks.

Betancur, whom the Agenda wrote about in a November story, is doing his best to avoid laying off any of his roughly two dozen employees.

For now, everyone’s working five days a week instead of six. Betancur has put out on display bushels of bananas, mangos, and melons; in the large refrigerators up front, milk and yogurt. It’s the fresh food he’d usually provide for the school. Now he’s selling it to customers.

Manolo's Bakery
Diana Cruz, an employee of Manolo’s Latin Bakery, prepares empanadas on Sunday. Manolo’s is one of many local businesses that is impacted by reduced foot traffic and lost catering jobs due to COVID-19. (Photos by Joshua Komer)
Manolo's Bakery
Alexander Girlado puts the finishing touches on a cake. Manolo’s has seen a large portion of its business affected as catering events and school lunches are canceled. (Photos by Joshua Komer)

“As a business I cannot think about profit,” Betancur says. “As a business I need to think about cash flow to keep my business running, the same thing I did in 2008.”

On Monday, Mecklenburg County officials put a ban on mass gatherings, prohibiting events that draw more than 50 people. Social distancing, experts say, is critical in curbing the spread of coronavirus.

The directive applies to things like concerts, church services, weddings, and conferences. In other words, the kinds of larger gatherings that keep many small businesses like Manolo’s Bakery humming.

Small businesses make up the vast majority of employers in Mecklenburg County. According to the Charlotte Regional Business Alliance, firms that employ less than 50 people total nearly 30,000, making up 92 percent of the county’s 32,102 businesses.

Within that small business category, there’s been a lot of attention on how local restaurants and bars will fare throughout this outbreak. Rightfully so — this week Governor Roy Cooper issued an executive order requiring the shutdown of restaurants to dine-in customers. Restaurants like Haberdish have had to lay off dozens of staff members.

Customers can still support many restaurants and bars by placing to-go orders, which are still allowed under Cooper’s mandate.

Other small businesses don’t have other alternative revenue streams like that to turn to, though.

In Charlotte and beyond, employers are telling their staffs to avoid non-essential travel, and to work from home. For many people with dogs, that means that daycare is no longer necessary.

That’s put a significant crimp in business for Pampered Pets Inn in Mooresville. The doggie daycare, pet spa, and training facility normally handles 40 to 50 dogs each weekday. Another 20 to 30 dogs stay overnight during the week, says Chris Braund, a Plaza Midwood resident who owns the facility with Karen Van Sickler.

Reservations for the next two weeks have slowed almost to a halt, though.

“We cater to people who need to travel, who need to be at work,” Braund says. “It’s a convenience-based business. When those needs go away, there’s no need for us.”

Pampered Pets Inn
Pampered Pets Inn (Courtesy of Chris Braund)

The biggest question for Braund is what to do about his staff, about 25 hourly employees. He’s been seeking counsel from human resources consultants and insurance specialists about potential layoffs. He hasn’t laid anyone off yet, though. For now, there’ve been enough reservations to cover payroll, the business’s biggest expense.

Braund has had to make a few big changes. The daycare is providing curbside service to customers, bringing their pets in and out for them to minimize contact. Employees are working in smaller teams. Braund has significantly reduced everyone’s hours. He anticipates up to $100,000 in lost revenue as a result of the outbreak.

It’s possible Braund and Van Sickler will have to close their doors once reservations stop, or when North Carolina gets a shelter-in-place order. If he has to lay anyone off, Braund says he is worried about how his employees would fare. Many are young, he says, and they don’t have much of a savings buffer.

Some large businesses — such as Nordstrom and Nike — have said they’ll continue paying employees even as they close their doors.

Small business, Braund says, can’t always afford to do that.

“If we lose our staff … they lose their apartments and livelihood,” Braund says. (Update: Braund says his employees should qualify for the extended unemployment benefits included in Cooper’s executive order.)

Around the country, major road races and other sporting events have either canceled or postponed because of the outbreak.

The Boston Marathon, which usually takes places in April, was recently pushed to September, for instance.

Conor Bollinger runs a private coaching business for endurance athletes both locally and remotely. All of the 15 athletes he trains have experienced some sort of outbreak-related disruption in their race plans, Bollinger says. Already, athletes are losing thousands of dollars in race fees, travel costs, physical therapy, and gym memberships.

“The athletes don’t need coaching any further since their races are no longer happening. Meaning, my coaching business is now suffering,” Bollinger says.

Around Charlotte, gyms have been announcing plans to temporarily close amid the outbreak, including all YMCA branches, Orangetheory Fitness studios, and Burn Bootcamps.

Hive Fitness, which just opened a few weeks ago in LoSo, has opted to temporarily close its doors, co-owner Josiah Boling says. Since the outbreak began, the gym has been experiencing “a significant drop in all measurable activity.” The county’s 50-person gathering ban applies to gyms, though Hive had made plans to limit class sizes to comply.

His gym’s closure, Boling says, will “undoubtedly” lead to layoffs. Based on cash flow reports he prepared this week, coronavirus could cost Boling’s business as much as $200,000 this year, from the closure to slowed membership sales going forward.

Boling says this feels different from the Great Recession. Many businesses saw the damage coming to their businesses months before it really started to get painful, he says.

For Boling and other small businesses, the coronavirus outbreak has felt much more sudden.

“COVID-19 is like putting me in the ring with Muhammad Ali,” Boling says. “(One) punch and it’s lights out.”

Hive Fitness
Hive Fitness (courtesy of Josiah Boling)

Hollis Nixon may not work directly in the hospitality industry, but her business does provide for it.

Core Concrete handles concrete pouring for commercial and residential businesses. Her team handles a variety of jobs, from indoor/outdoor countertops to fire pits to work stations. Nixon has an impressive client list: Divine Barrel Brewery, Suffolk Punch, and UNC Charlotte, to name a few.

But hers is one of the “unsexy” businesses people don’t think about much when they consider small businesses.

She has two full-time employees, plus several contractors. They’re booked up for now, through March, but nearly all of her new client and future business meetings have been canceled — meaning new business looks to be drying up.

“Some people may forget us because we’re not a weekend hot spot or a place where a memory was made over a good meal and/or brew,” Nixon says.

“We are scrambling to survive right now. But I’ll figure this thing out.”

Divine Barrel
Interior of Divine Barrel, one of Core Concrete’s customers (Courtesy of Hollis Nixon)

Many small businesses like Betancur’s are considering loans from the federal government to stay afloat.

Because of the outbreak, the U.S. Small Business Administration is offering low-interest loans of up to $2 million to small businesses that are losing revenue. The loans, administered by local SBA officials, can go toward costs like payroll and fixed debts.

Such assistance could help small businesses survive.

Boling, the gym owner, for instance, plans to apply when he can.

“The question for us and many small businesses is how long does it take to dig out of that hole. Is it possible? Is it worth the additional risk to the owner?” Boling says. “This is catastrophic for small businesses.”

Applying for such a loan requires providing financial statements. Betancur, the bakery owner, is reluctant to do so, given that he’s behind on some taxes and just received a lien from the federal government.

Last year, Betancur, a Colombian-born U.S. citizen, spent $10,000 to bail one of his employees who was picked up by ICE agents. Soon after that, he spent a few thousand dollars to replace an industrial mixer that broke.

So Betancur is trying to make up for lost business however he can. The bakery remains open to walk-in customers. Tuesday, doughnuts with bright green frosting and gold sprinkles lined the shelves for St. Patrick’s Day.

Soon, Betancur is expanding his menu and will start selling Latino-style sandwiches and tortas. Customers can customize their own with different selections of meats, cheeses, and breads. Betancur calls them “an economic line of sandwiches” because each will be no more than $5.

It’s not much. These sandwiches aren’t going to make him rich. Nor will they necessarily guarantee that the bakery won’t have to cut any staff.

But they provide a fresh revenue stream. And they are an affordable option for customers who may also be conscientious of their spending during the outbreak, Betancur says.

“Whenever a new challenge comes to me I say ‘OK, tomorrow I’m going to wake up earlier. I’m going to work harder. I’m going to do things better,'” Betancur says.

“But gosh, man. How do you control something like this?”

What has been your employer’s response to the coronavirus pandemic? Email us at [email protected]

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