Companies starting out face COVID obstacles

CALGARY • Flux Fitness Studio had been open for a grand total of 13 days before COVID-19 shut it down.

For those 13 days, coowner Tina Chin experienced what it was like to live her dream. Now, the firsttime entrepreneur is caught in a nightmare, not knowing when she will be able to reopen, whether she’ll have any customers to reopen for, or whether her entire personal and financial investment will be crushed under the weight of the pandemic crisis.

“I really hate thinking about it, honestly,” Chin said. “It’s really scary to think about what I’ve risked. It is a huge amount of my life savings that I’ve put into it, and I continue to use these funds to see this business through. It makes me sick to my stomach.”

Calgary’s small business community is reeling from the effects of COVID-19 and a series of strict public health orders that have been in place for more than two months. While Alberta leads the country in the percentage of small businesses (47 per cent) that have fully reopened as provincial economies relaunch, in Calgary — which has seen a higher number of COVID-19 cases — restaurants, pubs and hair salons were prohibited from reopening until Monday. Even then, they must abide by restrictions on capacity.

Many other businesses, including fitness studios, will not be allowed to open until Phase 3 of the provincial relaunch plan, for which a date has not yet been set. And with no inkling of when customer demand will return, most entrepreneurs are feeling stressed about the future.

According to the City of Calgary, there were 1,321 new business licences awarded between Jan. 1 and March 31, 2020. Many of these businesses, including Flux Fitness, barely had the chance to get off the ground before shutting down after a series of strict public health orders.

“It really sucked the wind out of our sails having to shut down,” Chin said. “We had an open house the Sunday before we opened and it was so busy and so much fun. Shutting down was heartbreaking.”

For any business, the repercussions of an unanticipated shutdown can be severe. Studies across North America have shown businesses forced to temporarily close because of a natural disaster or other catastrophic event have a lower chance of succeeding in the long run, and up to 40 per cent of never reopen at all.

In Calgary, following the 2013 flood that forced the closure of 4,000 businesses, only one to two per cent of those affected never reopened. Scott Crockatt, vice-president of the Business Council of Alberta, said the positive outcome was likely due in part to an aggressive “YYC is Open” marketing campaign.

This time, however, the continued threat of the virus makes a similar campaign impossible.