It’s a terrible time for (some) small businesses
What has doomed many startups has been boon to others’ inspiration
A counterintuitive silver lining to the pandemic is developing: While droves of small businesses across the United States have been crushed by COVID-19 and its restrictions, others have been pushed to lift off.
There has been a surge in new business startups this year, according to the U.S. Census Bureau. By the week ending Dec. 5, the bureau reported, business applications were up 43.3 percent over the same period in 2019. “But it remains unclear howmuch of the increase is attributable to entrepreneurs finding opportunity in the crisis to form businesses likely to hire employees as opposed to newly unemployed individuals starting their own businesses,” according to the Economic Innovation Group, a bipartisan public policy group.
This uptick, however, is offset by the fact that about 28.8 percent of small businesses were closed for good as of mid-November, compared with the start of the year, based ondata tracked by Opportunity Insights, a nonpartisan, not-for-profit research organization based at Harvard University.
In New York City, an estimated one-third of small businessesmight never reopen, according to a study by the nonprofit Partnership for New York City.
“The truth is, no one knows what’s next because no one has seen anything like the current intersection of crises,” said Nathalie Molina Niño, author of “Leapfrog: The New Revolution forWomen Entrepreneurs” and chief executive of O3, a privately held startup investment firm.
“Entrepreneurs are delusionally optimistic, by design,” she said. “Which is why even amidwhat some days looks like amass burial ground for small businesses across the country, with storefronts shuddered from coast to coast, entrepreneurs are still starting and, in some cases, growing their businesses.”
That’s what Eric Levitan plans to do. In April, after 25 years of working in technology and running software companies, Levitan, 49, started the Atlanta-based Vivo, a virtual small-group strength-training fitness programfor adults 55 and older and conducted live with a certified instructor. The classes, led over Zoom, were inspired by watching his own parents, who are in their 70s, struggle with aging and mobility issues.
It was a business that he had been developing for over a year, but the pandemic threw his original concept — in-person strength training classes in senior living communities — out the door. “Because of COVID, we shifted the model tomove the classes online,” he said.
For Levitan, the pivot to an online fitness service considerably increased his potential client base. “Now there’s no geographical boundary around it — we can trainsomeone inBrazil, California, Japan and have trainers anywhere in the world.”
For now, Vivo, which he’s building with his own funds — nearly $100,000 to date — is still in the early stages, with 50 members, ranging inage from52 to 85. Customers participate in 45minute classes twice a week. But the capacity, with nine trainers on board, is closer to 1,000 customers, according to Levitan.
Another pandemic-related surge in interest: indoor plants. In August, Alexi and
BrendanCoffey, started Steward, a virtual business based in New York City, to help people become successful plant growers.
“We had been working for the past two years or so, developing the technology for the app, building a team, testing, and the launch was scheduled for early spring,” said Brendan Coffey, 31. Before the pandemic, the couple had raised $500,000 from early-stage angel investors.
“We were blindsided, postponed the launch and rethought our plan,” said Alexi Coffey, 29. The Coffeys had deviseda consumer digital subscription, combined with a business service to lend horticulture advice to brick-and-mortar offices and restaurants.
“With our app, clients use their phone’s camera to scan rooms in their homes, and the app creates amap that shows variations in light distribution and suggests the best plants for the space and how to care for them,” Alexi Coffey said. Some customers have even asked for help building video-worthy plant wall backgrounds for their home offices.
The company now has roughly 5,000 customers worldwide. “We have benefited from the fact that people are at home and interested in growingmore than ever,” Alexi Coffey said. “Moments of planting and watering the plants break up the digital weird reality we are living in. We get to be a little bit of joy in people’s lives.”
Pickles have the power to produce happiness, too. In September, MarkMammone, 39, a sous chef, and Joe Bardakos, 30, a chef, founded Bridge City Brinery in Pittsburgh.
Five years ago, Mammone beganmaking pickles as a hobby. His inspiration was the sauerkrautmade by his grandmother, an immigrant from Croatia. The secret:
The cucumbers are fermented in a homemade brine.
“I started havingmy friends try them, and they were saying: ‘You need to do something with these. You need to sell them,’” Mammone said. “Once that idea set in, I thought, all right,
I’m going to start a pickle company.”
But it was a back-burner idea. “The pandemic is
actually what sparked the business back up,” he said. Bardakos offered to help and a partnership was born. “This is something we can do right now, and we can be in control of,” Mammone said, “and it is not going to cost us a lot of money.”
“Navigating uncertainty during this pandemic and the associated political and economic landscape is the biggest challenge for any entrepreneur,” said Sanyin Siang, executive director of the Fuqua/Coach K Leadership and Ethics Center at Duke University and author of “The Launch Book: Motivational Stories to Launch Your Idea, Business or Next Career.”
“The motivator is a deep belief in the idea,” Siang said.