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Small businesses are feeling sting of COVID-19
By Elyse Carmosino | May 27, 2020
For small business owners everywhere, the sting of COVID-19 has been all too real.
As Massachusetts enters phase one of the four-phase reopening plan announced by Gov. Charlie Baker earlier this month, many locally-owned businesses say they’re still struggling to stay afloat, with some questioning whether or not they’ll be forced to close their doors for good.
Jhonathan Santelises, owner of Lynn-based gym and fitness brand Jas Nutrifit, said that since the pandemic started, he’s only been able to retain roughly 30 percent of his regular customer base.
“We had to close right away,” he said of his initial reaction to the health crisis. “We didn’t know much about (what was happening), but I knew I had to close. I’m not going to be the one guy not doing the right thing. When our mission is to have people healthy, I didn’t want to get people sick.”
Like many others during this time, Santelises began offering his services online via Zoom workout sessions. One of the biggest problems, however, is that not all of his customers are comfortable using the platform, and he referred to the makeshift setup as “quite a big change.”
He added that he’s received some government assistance, but still has several bills to pay each month. Although Santelises made his peace with temporarily closing Jas Nutrifit’s doors to the public, as time stretches on, the future of the business he painstakingly built from the ground up grows more and more uncertain.
“It took years to build that clientele and that trust from people,” he said. “Nothing was given to me. It took a lot of work and a lot of years, and it’s like, now I have the platform, now I have the space to accommodate my people, and I can’t do nothing about it. It’s like a wall right in front of me.”
According to Salem State University assistant professor of economics, Kurt von Seekam, industries that can expect an especially difficult “return to normal” are those that provide “contact intensive” services. Restaurants, airlines, hotels, gyms, and the like are much more likely to bear the brunt of coronavirus economic woes.
Referring to a recent federal study, von Seekam said how much an industry will be affected correlates heavily with its “net contact intensity index,” which measures how much close contact occurs between employees, between customers, and between employees and customers.
“It’s those high-contact intensity, close-proximity industries that will be most affected, especially if the workers are unable to work remotely,” von Seekam said. “So when we think about the different types of companies this would impact, it would be your typical small business — a store owner where they’re confined to their resource space, for instance. Restaurants, nail salons, hair shops. Anything like that is going to be disproportionately impacted.”
Among those demanding a sweeping lift of COVID-19 restrictions is Vincent Delaney, who was one of hundreds of protesters congregated outside Gov. Baker’s home May 17 to demand state officials reopen the economy.
The Peabody resident and owner of V.I.P. Mechanical — a heating, air-conditioning, and HVAC repair company — said his small business has suffered considerably from Massachusetts’ tight restrictions, especially since roughly 80 percent of his customers are other service-industry businesses, like restaurants and hotels.
“At this point it’s just me and my fiancée,” Delaney said. “I’m probably (making) 25 percent of what I was last year, and summertime is always busy in this business.”
If things continue the way they have been, Delaney said he’s seriously considering moving his operations to New Hampshire, where he has some professional connections and where restrictions are more relaxed. Otherwise, he’s not sure he sees V.I.P. Mechanical surviving past September.
“If things don’t change quickly, I won’t even be working,” he said.
Delaney’s business is just one of many feeling the ripple effects of COVID-19 as the virus’ impact on high-contact businesses trickles into other industries.
“The mechanical industry, like all industries, is going to be hit,” said Moonsu Han, professor of economics at North Shore Community College. “Because the service chain is related, all of these (industries) are related. Obviously, when hotels and restaurants do not have enough customers, then there is less demand for air conditioning, and everyone’s income is going to go down because of this lockdown.”
While it’s difficult to predict the long term effects of the coronavirus pandemic, Han suspects industries will begin to embrace a “new normal” as they adjust to post-pandemic life.
In the meantime, he believes that ensuring the public is keeping up with social distancing guidelines — in conjunction with consistent government assistance for struggling businesses — will ultimately make or break how quickly the U.S. is able to recover from the virus’ economic fallout.
“It is so difficult to call whether we should all reopen immediately or wait, but the most important (aspect) is going to be the health issue, because a health issue caused this pandemic,” he said. “It is all rooted in health problems, so to get out of this economic mess, we should stay as safe as possible by keeping social distancing and following CDC guidelines.
“Without having a clear solution for the health issue, we cannot go back immediately.”
Such advice may be more easily doled out than followed, however, as countless small business owners can only wait day by day for news about the state’s reopening plan.
“I don’t know, to be honest,” Santelises said. “Virtual (classes) … are going OK, but the flow of clients isn’t there.
“(As a business), people go to you for a reason. We’re a family, so it’s hard. We’re hoping things go back to normal five months from now, but I can’t really tell you. I’m trying my best to keep my people accountable and stay in communication with them, but is it the same as before? It’s not even close.”