Almost 190,000 Illinois businesses have been started during the pandemic. Five of them share how they did it.
Almost 190,000 Illinois businesses have been started during the pandemic. Five of them share how they did it.
“I just felt like this was the time and hoped that by the time we were ready to be open, gyms would be opening back up and people would be eager to get back.”
The coronavirus pandemic has been brutal for many small-business owners.
Retail shops, gyms and bars closed for months, while restaurants struggled to subsist on takeout. But even as many business owners closed their doors for good, others saw opportunities to start something new.
More than 4.6 million businesses have been created nationwide since last March, according to the U.S. Census Bureau, which tracks the number of applications for business tax ID numbers. In Illinois, there were nearly 190,000 applications during the year that ended in February — up about 61% compared with the prior 12 months.
While business creation slumped during the early days of the pandemic, it surged over the following months, said John Haltiwanger, an economics professor at the University of Maryland. Growth was particularly swift for businesses without employees.
Some people became entrepreneurs because they needed work to replace jobs lost during the pandemic. “We’ve been gaining back jobs slowly, but we’re still in the hole millions of jobs,” Haltiwanger said.
Others took a chance on a business idea they’d long considered but never acted on.
Here, five Chicagoans from across the city share what it’s been like to launch a company during the pandemic.
Compact Fitness, Little Village:
Daniel Diaz knew he wanted to open a gym but wasn’t sure when he would make it happen — until the pandemic hit.
“I just felt like this was the time and hoped that by the time we were ready to be open, gyms would be opening back up and people would be eager to get back,” said Diaz, 34.
He and his wife, Elissa, 32, weren’t able to get a small-business loan, so they couldn’t open the big, warehouse-style CrossFit gym he originally dreamed of starting. The Diazes, of Little Village,
— Daniel Diaz, owner of Compact Fitness in Little Village
invested $15,000 of their savings for a space that could accommodate six people at a time. While they prepared, Daniel Diaz, who had been working at a gym in Pilsen before the pandemic, went back to an earlier job as an emergency medical technician.
They found a landlord willing to give them a couple months of free rent and set up six individual workout stations inspired by the gym Diaz set up in his home office at the start of the pandemic.
Compact Fitness offered its first classes Sept. 1 and now has 75 members.
Having to start small was a “blessing in disguise,” because it kept initial costs down, Diaz said. The gym is profitable, and he hopes to find a space for the larger gym he envisioned by the end of the year.
“To say I was scared would be an understatement,” Diaz said. “Because we couldn’t get any funding, it was our money we were risking. We emptied the savings and crossed our fingers. At the end of the day, there’s only one way to find out. You have to trust yourself and trust your process.”
A Paw Place, Hyde Park: Rebecca Morgan, 33, always hoped to open a retail shop where her Hyde Park-based dog walking and pet care business’ clients could find food, treats and toys for their pets.
Then she watched as people seeking company at home during the pandemic began purchasing and adopting new pets.
“The market was potentially bigger, and I didn’t want to miss out on that,” she said.
She funded the shop’s opening with savings and a loan from the U.S. Small Business Administration.
A Paw Place opened at the end of September. While the store isn’t yet profitable, Morgan hopes that will change in the coming months.
As people start returning to work and school at least part-time, more have signed up for other services A Paw Place offers, like dog walking, day play and training.
Foot traffic has picked up with better weather, and Morgan said she hopes the shop’s location on a busy retail street will attract new clients. She felt lucky to find the space after another retailer closed because several other neighborhood landlords told her they didn’t want to work with a business involving animals, she said.
“There’s no way we would have gotten this spot were it not for the pandemic,” she said.
Pepita Meals, East Garfield Park: At the end of 2019, Ivan Kumamoto quit his sales job to start a meal delivery service focusing on the healthy, sustainable dishes he’d struggled to find on his office lunch break. Just a couple of months later, the pandemic forced Kumamoto to put plans for Pepita Meals on hold.
“Nobody knew how deadly the virus was, and I felt like there was too much risk,” said Kumamoto, 27, of West Town. “Who’s starting a restaurant business in the middle of the pandemic?”
His former employer laid off workers, so returning wasn’t an option. He considered other ideas but kept coming back to Pepita Meals.
He hired a chef on Craigslist and started developing recipes for Mexican dishes like vegan pozole verde and chicken with almond mole sauce. Kumamoto, who lived in Mexico before coming to the U.S. at age 11, wanted to focus on the cuisine he knew best.
Pepita Meals opened to customers in December, and growing the business has been a challenge. Kumamoto initially hoped to deliver big batches of orders to offices, which minimizes delivery costs and brings free advertising as employees watch co-workers pick up their meals.
With offices still largely abandoned, he pivoted to home delivery — “a bit of a nightmare, to be honest” — and has been trying to get the word out with online ads and chatting with potential customers on Instagram.
The company usually gets orders for 21 to 25 meals a week, made on Mondays at food and beverage business incubator The Hatchery, and delivered Tuesdays, Kumamoto said. He hired a chef who works the one day a week they cook, with Kumamoto working as line cook, delivery driver and marketer.
Kumamoto estimates he has about six months before the business needs to start breaking even, which will require roughly doubling or tripling current sales.
“I want to get a more steady flow of orders so I can think about bigger goals more in line with the mission, like how to make the ingredients more sustainable, how to get people to eat more plantbased and how to gradually grow the business rather than worry about solvency or is this going to make it,” he said.
Chicago Plants, Wicker Park: When Ryan Glynn lost his job in finance at a health care startup in July, it took less than two weeks for him to realize the job market — even for someone with a master’s degree and CPA — looked “a little bleak.”
So Glynn, 27, decided to open a plant shop. He noticed people taking an interest in houseplants while stuck at home — an interest Glynn discovered a few years earlier, while caring for plants his family received after his brother’s death.
The situation “gave me a sense of personal freedom to do something different,” he said. “The world we were living in became very different, and also this thing I held really close to me for personal reasons was being taken up by a lot of people.”
Glynn’s landlord agreed to give him a deal on rent in the empty retail space below his Wicker Park apartment while working to land a long-term tenant. Glynn maxed out his credit cards to order plants from Florida and opened in September.
Chicago Plants was profitable within three months. Many customers discovered the shop through word-ofmouth and photos on Instagram, Glynn said.
“I’d planned to chew away at savings for a little while … so when November and December came and all of a sudden I was seeing a positive bottom line, I was really thrilled and it gave me a little reassurance that what I was doing wasn’t crazy,” he said.
Glynn decided to become a permanent tenant at the shop and signed a five-year lease. He is applying for a loan with the U.S. Small Business Administration and plans to use the funds to make some of his seven employees full-time, start paying himself and invest in a basement greenhouse to keep more inventory on hand. He credits some of the rapid growth to the way the pandemic spurred interest in houseplants but isn’t worried the enthusiasm will fade.
“We’ve had a lot of people come in and say they never had a houseplant and are now looking to get into them,” he said. “Once you buy a houseplant you don’t stop with one.”
Boutique, Morgan Park: When the pandemic hit last year, Lynda Swan McClendon had thousands of dollars’ worth of jewelry — and nowhere to sell it.
McClendon, 63, of Morgan Park, had been selling jewelry at church and school events that invited vendors, as well as a Chicago Ridge store that hosted about 15 vendors. All those events were canceled, and the store closed.
Then the owner of a Morgan Park real estate agency offered McClendon a portion of the office she was no longer using. McClendon, a retired administrator at the Illinois Department of Children and Family Services and executive pastor at Harmony Community Church in Lawndale, had no plans to open her own boutique. But when she saw the space, she thought it had potential.
“I just stepped out on faith and went for it,” she said. “It’s really been a faith walk.”
McClendon used a $10,000 U.S. Small Business Administration loan to stock up on casual, affordable apparel like jogging suits and leggings and accessories to sell along with the jewelry.
Jazzy Ladies Jewels Boutique opened in August, and on the day of the ribbon cutting, more than 100 people came through the store.
One week later, someone broke in and stole some merchandise. McClendon had to close for a week and upgrade her security system, but “we got back on the bandwagon,” she said.
She used social media to get the word out and people from her church community have been supportive, she said.
Sales were strong over the holidays but slowed in January and February, especially during a couple of particularly cold, snowy weeks. Business has picked up with better weather, said McClendon, who hired a manager to run the store in the mornings when she teaches social work courses at Illinois State University.
She applied for a loan she hopes to invest in an upgraded website with an online store. In the meantime, she’s made online sales by posting merchandise on social media and meeting with customers over video calls.
The store isn’t breaking even yet, but “we’re holding our own in the community,” she said. “We’re on the upswing. … It gives me hope we’re going to do great when Chicago opens up.”