×

Coronavirus forces small businesses to rethink their strategies

By Joyce M. Rosenberg

AP Business Writer

NEW YORK (AP) — Renee and Michael Brown planned to open a third location for their coffee company — and put their plans on hold when the coronavirus hit.

Sales at the Browns’ San Francisco coffee shop, Weaver’s Coffee & Tea, are down about 4%; while that’s not drastic, the coronavirus outbreak in the U.S. is still in its early stages and the Browns feel it’s too risky to make a big commitment.

“We’re safe the way we are right now,” Renee Brown says. “But what if it becomes a pandemic where you can’t leave your house?”

As the coronavirus spreads, many small business owners are rethinking their strategies and adjusting the way they work. They’re responding to a drop in revenue as customers stay home, cut back on purchases or demand that companies help protect them from the virus that has sickened more than 1,300 people in the U.S. and more than 127,000 worldwide. And some small manufacturers and retailers, the first to deal with fallout from the virus as it stalled Chinese exports, are still struggling to get product shipments even as China’s factories have been reopening.

Businesses are also feeling the impact of the economic uncertainty created by the virus and the ensuing turbulence in the stock market, which forced the Dow Jones Industrial Average down more than 28% since it reached a new closing high Feb. 12. The market turbulence has discouraged the Browns from seeking investor money to fund their planned expansion. They’re aware that would-be investors are reluctant to commit money to small companies amid unknowns like how widespread the virus will be and what damage it will cause to the economy.

“We need to wait until things dissipate,” Brown says. “I’m probably going to focus on what I can accomplish today.”

At some businesses, the spread of the coronavirus is forcing owners to change the fundamental ways they work. At Fracchia & Co., a company that offers counseling and advice about professional, career, marriage and relationship issues, staffers are now agreeing to clients’ requests for meetings over the phone rather than in person. That’s something the Sydney, Australia, practice has not done in the past. But nearly two-thirds of the firm’s clients have asked for phone meetings since the virus outbreak began, and while co-founder Danielle Fracchia has reservations, she’s saying yes.

“Face-to-face is more engaging,” Fracchia says. “You can’t be feeling their energy, seeing their body language, picking up cues when you’re on the phone.”

Some clients asked in the past to work over the phone, but “we haven’t entertained them for all these reasons,” Fracchia says.

The outbreak has forced businesses of all sizes to adjust — for example, business travel is being canceled and meetings are held via videoconferencing. But small businesses can be particularly vulnerable to changes in spending by consumers and other companies. The cancellations of meetings, social events and the suspension of public gatherings including NBA games hurts companies that provide food, equipment and services for hosts and event organizers, and these are often small businesses.

Business is down by nearly half at Jet City Device Repair’s two Seattle-area locations that repair smartphones and other electronic devices.

“People aren’t getting out. They’re choosing to live with cracked screens,” owner Matt McCormick says. He also has a store in Chicago where business is down slightly.

McCormick isn’t cutting his staffers’ hours although business is so slow. But, he says, “if this is a three- or six month issue, we would have to start.”

Some brand-new entrepreneurs are being forced to rework their strategies.

NEWSLETTER

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *
   

Starting at $2.99/week.

Subscribe Today