As small-business owners try to survive the pandemic, experts share this advice - CNBC

As small-business owners try to survive the pandemic, experts share this advice - CNBC


As small-business owners try to survive the pandemic, experts share this advice - CNBC

Posted: 01 Oct 2020 10:44 AM PDT

Jill Justin is trying to figure out the next move for her business, Jill Justin Dance Alliance, after the pandemic cut business in half.

Source: Jill Justin

Jill Justin had to think fast when the coronavirus pandemic hit.

As the owner of Jill Justin Dance Alliance in Middlesex County, New Jersey, she went from having close to 500 students taking classes seven days a week to shutting her studio doors.

After taking some time to regroup and change her business model, Justin started offering Zoom classes and asked those who could afford it to continue paying tuition. Her revenue dropped by 50%.

Now that her business is back open with restrictions like masks and six-feet of social distancing, and at 50% capacity, Justin is wondering about her next move.

"Should I return to my corporate career or take on a part-time position?" she said. "Should I reinvent my business even more for these changing times?

"Should I look for different business opportunities?"

Staying in business

Keeping the doors open is the biggest challenge facing small businesses today.

Approximately 60% of businesses that closed during the crisis won't be reopening, according to Yelp's Economic Impact Report, released in mid-September.

Businesses like Justin's that are struggling to find their footing should think about what their community's needs are now, said beauty icon Bobbi Brown, who left her namesake cosmetic company in 2016 to start her new lifestyle and content company.

"This is an opportunity for people that have small businesses to pause, look at everything and say, Where am I now? What was working? What wasn't working?" she told Justin.

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For example, Brown's new line, Evolution 18, is sold in retail stores. When the pandemic hit, she had to pivot to direct-to-consumer sales.

She suggests Justin offer something that her clients can do while they are home and be ready to take the next step when things change.

Reaching out to a support organization in your community is also important right now, said Phillip Gaskin, vice president of entrepreneurship at the Kauffman Foundation.

For instance, the Kaufman foundation has its 1 Million Cups program, which provides free weekly meetings for entrepreneurs around the country.

The racial divide

Entrepreneurs of color have been hit even harder during the pandemic.

The number of Black business owners dropped by 41% from February to April, according to a June report from the National Bureau of Economic Research. The ranks of Latino business owners fell by 32% and Asian business owners by 26%, while the number of White owners fell 17%, the report found.

Stephanie Bermudez, founder and CEO of Startup Unidos, is concerned about racial disparities in the business world.

"Black and Latinx and other people of color have been disproportionately impacted by the pandemic because of common social and economic factors that were already in place, that only increased our risk for Covid-19," said Stephanie Bermudez, founder and CEO of Startup Unidos, which focuses on cultivating entrepreneurship on border communities in Arizona.

"These challenges can no longer be shrugged off or go uncharted."

Melissa Bradley, whose company 1863 Ventures focuses specifically on helping entrepreneurs of color, said the first thing business owners of all ethnicities should do is an honest reflection on their practices and to make sure people feel safe.

Right now, people are feeling stress, so that means creating some space and perhaps offering more days off. Also, think about what free resources, like mental health support, that you can offer your employees and how to deploy them, Bradley added.

White business owners should not lean on people of color to answer all their questions about systemic inequality, she said.

"Be sure to engage and really do a deep introspection of what your role is in the structural barriers and systemic racism that we have," Bradley said.

It's also important for entrepreneurs of color to feel empowered, said CFP Lazetta Braxton.

"Know that you are not alone," she said. "We have a history of getting through tough times."

Prospecting for new business

For Ginger Jones, who owns an online reputation management software company called WebPunch, in-person meetings, conferences and referrals are the main way her company gains new business.

Now that conferences and travel have been shut down, she's concerned about how to create genuine relationships.

"We are doing some fun things, like cooking classes that combine clients/prospects, webinar series, etc.," Jones said. "But getting through the 'digital' noise to prospects is tough, as everyone is doing these types of things."

Bobbi Brown suggested Jones use the time she now has due to that lack of travel and conferences to think about what she can be doing and how to connect with people.

"Use your phone, use your Instagram," advised Brown, who said she's been talking to people who have reached out to her through social media.

"Figure out who you would like to possibly have a conversation with," she added. "People are a little bit more ready right now to have these conversations.

"There are many of us entrepreneurs that have been helping other small businesses."

Government support

Business was booming for entrepreneur Eze Redwood after his consulting business was acquired by Kansas City, Missouri-based marketing Lillian James Creative in December.

Everything ground to a halt when the pandemic hit. The team has since been working days, nights and weekends to build the company back up.

"The crisis that came with the pandemic was the first time that many main streets and minority entrepreneurs felt like their local governments actually cared about them," said Redwood, now vice president of community and experience at the firm.

Lillian James Creatives' Eze Redwood, left, and Aaron Fulk used Fulk's LinkedIn Live shows to promote businesses and nonprofits during the pandemic.

Source: Lillian James Creative

His concern is how to ensure that support continues after the virus has passed, especially since local governments will be facing critical budget deficits.

"Think about how to demonstrate your impact and your value because everything is going to be opportunity costs," said 1863 Ventures' Melissa Bradley.

She suggests entrepreneurs go to their legislators, not only during times of crisis, and leave behind one page of information about the business. Also, find a task force in your area that focuses on small-business issues and invite yourself to join in. Lastly, look at what other cities have done for entrepreneurs and present it to your legislators, since peer groups can be a great influence, Bradley said.

Remember, small businesses generate more than 40% of economic activity in the U.S.

Gaskin agrees and encourages entrepreneurs to believe in themselves.

"You already started the business," he said. "Look at the odds that you beat in starting that business.

"Understand that you have it in you and many people are pulling for you."

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

For Pitt center and its director, it's business as unusual - Observer-Reporter

Posted: 02 Oct 2020 11:00 PM PDT

Small businesses are big business for Ray Vargo and his staff. And they've become much bigger during the pandemic.

"Our mission is to be an economic development generator," said the director of the University of Pittsburgh Small Business Development Center.

"We were consulting, one on one, with 600 to 700 businesses a year, but because of COVID-19, that number has basically doubled because of (the Paycheck Protection Program) and other things."

SBDCs are funded by the U.S. Small Business Administration and states, to help entrepreneurs navigate all phases of development. Vargo and his consulting staff of 10 are embracing that duty.

They welcome the intensive workload, assisting businesses throughout Southwestern Pennsylvania with training, consultation, applications, loan searches, business plans and more. This is a severe time of need for old clients and potential new ones, and he wants owners and would-be owners to be aware Pitt's SBDC offers myriad ways to help.

It has been highly successful in that endeavor. In fact, at the moment, the center is at a level unmatched by its peers.

The SBA recently honored the Pitt center as its premier SBDC for 2020. The Oakland operation was selected from among nearly 1,000 centers across the country – the first Pennsylvania SBDC to be so designated.

Pitt received the 57th SBA award during National Small Business Week, making it No. 1 – a ranking well above its undefeated football team. The center is in charge of SBDC outreach offices in Washington and Greene counties, and shares that duty in Allegheny County with Duquesne University's SBDC.

"We're honored by this. It's a great recognition of the work our entire team does," said Vargo, an SBA employee for 25 years.

Dr. Kelly Hunt, Pittsburgh district director for the SBA, is thrilled as well.

"Pitt's small business contracting endeavors have been either emulated by other institutions or used throughout the commonwealth's 16 SBDC network," said Hunt, a Centerville native whose district oversees 27 counties in this half of the state. "We're not only proud they're being recognized for their service, but also pleased they are an award-winning resource partner."

SBDCs were first organized in 1980, and Pitt was among the first in the nation to join.

Pitt's director, a Whitehall resident, did not begin his career with the agency, but segued into that after securing a master's in business administration at California University of Pennsylvania.

He said he extended his Washington County roots in 1995, "when the university decided it needed a full-time (SBDC) presence" there. The Pitt center opened an outreach office at the Trust Building in downtown Washington, before relocating it down the hill, to the train station on South Main Street.

That outreach office is regarded as one of the most efficient in the state.

Vargo worked there for five or six years before moving to the university. In between, he set up the Greene outreach office on High Street, Waynesburg. Zach Patton is the management consultant of the Washington and Greene outreach offices, which share the telephone number 724-229-8078.

He said he and his consultants strive "to meet face to face with businesses owners, so some of them don't have to come all the way to Oakland." The center works with numerous organizations, including PA CareerLink, Southwest Training Services Inc. and area chambers of commerce.

Pitt's center is currently involved with the Washington County chamber on a "Plugging into Profits" webinar series.

As if he weren't active enough, Vargo also teaches accounting and small business management at Pitt and the University of Waynesburg.

Jason Capps is a local entrepreneur with a keen appreciation for Vargo and the Pitt center. He is owner and chef of Belle Sera restaurant in Cecil Township, and has worked with the center for many years.

"Ray has helped me every step of the way with business plans, profit-and-loss statements and obtaining financing for my restaurant," Capps said in a statement. "We're in our 15th year and I still bounce ideas off Ray."

Asked about his success, Capps said, "Find your local SBDC because there are opportunities there for you to start a small business. I wouldn't be where I am today without Ray."

October, National Women's Small Business Month, has arrived – and Ray Vargo and the top-ranked SBDC in America are still working fervently to assist small businesses at a troubled time. And he is not dissuading entrepreneurial newbies.

"We encourage any individual thinking of starting a business to reach out and take advantage of our resources and programs (by visiting sbdc.pitt.edu)," Vargo said.

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