Virus forces companies to adjust
Businesses cautious as coronavirus continues to spread
NEW YORK — Rachel Sklar planned to go to the big South by Southwest film, media and music gathering in Austin, Texas, this month, but changed her mind as cases of coronavirus started appearing in the U.S. She was scheduled to speak at the annual event and expected to recruit new members for her businesswomen’s organization, TheLi.st.
“I’m less worried about getting sick than I am about getting stuck in Austin, either by quarantine or, God forbid, things snowball and there is some sort of air travel freeze,” Sklar says. She’s concerned that either turn of events would prevent her from returning home to her nearly 5-year-old daughter in New York. Some hotels overseas went on lockdown after guests tested positive for the virus, and flights to some cities have been suspended because of widespread outbreaks.
Small businesses in the U.S. and other countries are dealing with the fallout or even just the possibility of the coronavirus. Owners are canceling or changing plans, arranging for staffers to work from home, even asking employees who have traveled to places with widespread outbreaks to stay home for as long as a month. Some manufacturers are stockpiling raw materials and components, and companies that depend on in-person interactions with customers are exploring Plan B — getting their work done via video.
Sklar is aware that at this point, there isn’t a widespread U.S. outbreak but “it’s not unreasonable to think that there are these possibilities.” She’ll try to attend sessions on video when South by Southwest begins, but she’ll lose out on chances to network.
Many owners whose companies’ work is done on computers and the internet are setting employees up to work from home. In New York, the 17 staffers at Lunchbox now must take their laptops and chargers home every night to ensure that they can continue working if there is a widespread outbreak in the city. CEO Nabeel Alamgir is also requiring staffers who have visited countries with known outbreaks to work from home for 30 days; that includes one who recently went to Paris and another currently in Thailand.
Small manufacturers and retailers have contended with shortages of components or products because factories in China, already closed for the weeks-long Lunar New Year holiday starting in January, remained shut as the virus spread. Christa Cotton worried that she wouldn’t be able to buy glass bottles for her El Guapo Bitters and cocktail mixes. So Cotton bought as many bottles as she could from U.S. warehouses, stockpiling a year’s worth.
But Cotton, whose company is based in New Orleans, is still looking for bottles because of the uncertainty about the virus.
“We’re researching other countries that make the same raw materials and comparing prices in order to make a contingency plan if our supply chain is broken or significantly affected by the outbreak,” she says.
Some owners are contending with outbreaks far away. Umberto Malesci’s wireless tech company, Fluidmesh Networks, has 10 staffers in Milan; more than 2,500 people have tested positive for the virus in Italy, with half in Lombardy, the region where Milan is located.
“We had to switch to telecommute operations with essentially no notice,” says Malesci, whose company also has 10 staffers in Brooklyn, N.Y., and another 10 scattered across the U.S. “The outbreak in Italy was unexpected and companies had to react within 24 hours.”
Malesci is prepared to have U.S.-based staffers work from home if necessary. But he’s finding that face-to-face meetings with some clients are impossible — some in North America have refused to meet with his staffers from Italy.
“It’s understandable and not a big deal in the short term, but it will [affect] the way we can do business on the long run,” Malesci says.
In Poland, where the government has warned it’s only a matter of time before the first case is confirmed, “people are more panicked day after day,” says Mike Jackowski, co-founder of Asper Brothers, a software development company based in Warsaw.
Four clients from Australia, Hong Kong and Britain have already canceled trips to Asper Brothers to start new projects. Jackowski is trying to reschedule the meetings and hold them via video, but the delays are costing him revenue. Meanwhile, Jackowski is also trying to ensure that his workplace is healthy; he’s getting his office cleaned more often, supplying the 15 staffers there with hand sanitizers and asking those who have traveled to work from home for two weeks.
Owners who depend on in-person interactions with customers for their revenue are anxious about what could happen if people are forced to stay home. At ThoughtSTEM, which runs after-school programs and summer camps to teach children coding, cofounder Lindsey Handley is trying to come up with alternatives if the schools close in the company’s hometown of San Diego or if parents are too nervous to let their children go to group activities.
“I’m already noticing that our summer camp sales are about half what they were last year at this time,” Handley says.
Over half the company’s revenue each year comes from summer camp sales. “If we are not able to run those summer camps, our company will be in danger,” Handley says. ThoughtSTEM has recently started classes in Dallas, Minneapolis and Reno, Nev., so Handley is hoping that diversification will help.
Revenue is down between 40% and 50% at MaxTour, a Las Vegas-based company that does minibus tours to the Grand Canyon and Antelope Canyon because tourists, many from Asian countries, have canceled their trips. Founder Matthew Meier is putting projects like new promotional videos on hold.
“I have to just wait it out,” Meier says. “The travel industry is boom and bust in a lot of ways.”
Meier has had to reassure the drivers on his staff who worry about getting sick while being enclosed with 15 passengers in a minibus; some drivers have asked to wear face masks. Meier has passed along information to them from the U.S. Centers for Disease Control, that healthy people shouldn’t be wearing masks.
“It’s going to scare people, and not help anything,” he says.