Small Businesses

COVID-19 Shutdown Leaves Businesses Struggling to Survive

By Thomas K. Pendergast

Green Apple Books, a Clement Street institution since 1967, has had to close its doors to customers since the coronavirus pandemic prompted a shelter-in-place order that shuttered non-essential businesses in March. The co-owner of the independent book store and music center, like other local small businesses owners, has serious concerns about its survival. Photo by Thomas K. Pendergast.

The debate about opening up businesses without creating another tsunami of COVID-19 infections – like the Spanish Flu’s second wave that killed millions more people than the first wave – is consuming the national dialogue. 

Part of that debate involves the survival of small businesses, including those in San Francisco’s Richmond District, as the local economy gets hit by the ripple effects of the coronavirus pandemic. 

The City’s preliminary estimate on the number of businesses that will likely be either partially or fully impacted by the shelter-in-place order is more than 14,000, possibly resulting in nearly 167,000 employees becoming unemployed. 

One business that has very much been affected is Green Apple Books on Clement Street. It shut its doors and furloughed about three-quarters of its staff. Yet co-owner Kevin Ryan said they haven’t given up; the store now resorts to the Internet for life support with online book sales.

“It continues to be really strong,” Ryan said. 

He has kept nine people on the payroll, now all working from home, mostly filling orders from the website. 

“It’s not enough to replace what we had when we were open, but it’s enough to pay all of them and maybe have a little money to pay the rent,” Ryan said. “We’re not paying the rent in full, but we’re trying to make some good-faith effort to give a little something to the landlords.”

For the most part, they are deferring rent payments until they reopen.

He said since it is a unionized store, Ryan furloughed all of the union staff – about 30 people total – but kept its managers on for the time being.

“Everybody is going to have to share the pain. Landlords can’t expect to get their rent and banks can’t expect to get their mortgage payments and all the way up the ladder,” Ryan said. “Otherwise, the building is empty, we’re out of business, nobody’s getting any money out of it, and that doesn’t do anybody any good.”

When they do open up again, Ryan said he will bring back as much staff as soon as possible and might even offer curbside delivery, especially if they are still limited to a certain number of people allowed inside the shop at any one time. 

“People aren’t just going to rush out and resume life like it was. It’s going to take a long time.”

He has applied for federal stimulus money but was only notified that their application was received, nothing more. 

Meanwhile at City Hall, District 9 Supervisor Hillary Ronen has sponsored legislation to raise $10 million for a special fund targeting small businesses that will not be getting federal stimulus money by providing no-interest loans through the City’s Office of Economic and Workforce Development. 

Ronen admits this will not be enough money to go around to everyone who will apply for it. 

“I have absolutely no doubt that we will have way more applications than we can fund,” she said. “But getting this money out the door and working for those small businesses now is the main objective.”

“This relief fund is not only just about small business. It’s also about people trying to keep their housing and it’s also about feeding people,” District 1 Supervisor Sandra Lee Fewer said. 

Natalya Ringo, the owner of Ninelus Salon on Geary Boulevard, said she could use some help. Her business is totally shut down, and her beauticians are all independent contractors.

“We don’t know what the situation is because they are independent. They can give us notice anytime, but so far everybody’s staying,” she said. “So we don’t know what’s going to happen.”

Ringo said she applied for the stimulus money, but so far she has not  received a response.

“We can’t really afford to do anything right now because we’ve been closed for more than a month, so nobody is working. Until people have gone back to work, we’re pretty much late on the rent and late on everything. The money’s tight right now, and we don’t know how long it’s going to be this way.”

She said she’s been working with the management company running the property, and they understand the situation, so for now she plans on sticking it out because she might be able to hold out for another month.

Meanwhile, San Francisco Mayor London Breed is calling for the City to defer or eliminate certain business fees.

“I think it’s important as a city that we look at all of the fees that we charge our businesses and make some decisions to eliminate fees in general that have a negative impact on the ability for our small business community to return. And that is something we’re going to continue to work on,” she said.

Breed said the City is already going to defer collecting the business registration fee until Sept. 30, which could result in $49 million worth of deferrals for 90,000 businesses throughout the City. They are also extending the deadline for the Unified License Fee. 

“This fee … includes charges to restaurants, bars, small retailers, hotels, tour operators and other businesses that have been especially hit hard by the pandemic,” she said. “We have to focus on our economic health.” 

Alice Kim runs Joe’s Ice Cream on Geary with her husband, Sean Kim. They are still doing take-out orders but no customers are allowed inside. 

“We are basically an ice cream parlor,” Kim said. “So take out orders only is not going to be enough for us to survive. We just started the delivery order, like Uber Eats and Grubhub, so that we can still stay connected to the customer somehow.”

But those delivery services charge her fees, so she’s not getting rich. Far from it. 

“Their service charge and commission fee will be 30%, so there’s going to be no profit margin for us because we still need extra money to cover the costs,” Kim said.

They are hoping to at least make rent and payroll right now. 

Although they have not gotten a stimulus check from the federal government yet, they did get some money through a connected offering, the Economic Injury Disaster Loan. 

“They pay in advance and then later they deduct it from PPP (paycheck protection program). It started coming in from last week. I know a couple of other small businesses who got it. I know they are delaying the PPP because the government ran out of money,” Kim said. “So at least I can cover this week’s payroll and then part of the rent. With that money I can cover a month’s payroll but not more than that.”

While she declined giving an exact figure, she said the loan was less than $10,000.

 “I know we cannot survive like this too long. But also at the same time, we can’t just open up everything when there’s no promise to cure what’s going on,” she said. 

Michael Ireland is the co-owner of the High Treason wine bar on Clement.

“We’re selling bottles of wine and that sort of thing a couple of days a week, just out of our front window,” he said. “We keep the door locked, so no one’s actually coming in. 

“So we’re just trying to stay afloat at this point. Most of our other bills have been deferred, so that’s been very nice. Our landlord did give us a little bit of a break for April rent. We haven’t had the conversation about May.”

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