As the pandemic shutdown stretches into the winter, small businesses are struggling to stay open. A survey of business owners found that more than 1-in-3 small business owners will not make it past the next three months. The outlook for small business owners of color is even worse: The survey shows that 41% of Black and Latino-owned business won’t make it through the next few months without additional financial support. Meanwhile, lawmakers are still trying to hammer out an economic stimulus deal.
Reach Further brought three entrepreneurs together to meet each other for the first time and share COVID-19 business survival lessons and strategies.
Angie and Lupe Martinez are the owners of Novacane Bar & Grill, a full liquor bar geared towards millennials, an untapped market in the Southeast Los Angeles area. They also just invested in a second bar location in Downey. Angie is also an Instagram influencer.
Chris Luna is an owner of Raquel’s Candy “N” Confections, a party supplies store in Downtown LA, which he runs with his two brothers. Last year, they also launched an e-commerce site. Chris also runs a piñata factory in the center of LA’s piñata district.
Here are excerpts from that conversation, which have been condensed and edited for clarity.
Lupe: We got creative and got a canopy, and we built a wooden fence, like a white picket fence. And we built a temporary bar area where they can sit, and put TVs outside, and plants, and do a little bit of decorations so that it looks nice and appealing.
Chris: We completely did a 180 with our business. Prior to closing, we invested quite a bit in a machine that helped us speed up the piñata making process, and that machine was primarily made to form and cut the cardboard for piñatas. But since then, my brother, who's in charge of it, he actually started making face shields, and he's got two large contracts with school districts to make partitions out of Plexiglas. So, that helped us keep afloat and keep the machine running.
Lupe: Yeah, we invested in a new POS (point-of-sale) system. The customer just taps their credit card on the new system, and it’s pretty much hands-free. To check their temperature, we also have a new system to where everybody that comes in, we get their ID and it stays in the system, so if there anything happens, we can always go back to that day and see who was who was in our establishment.
Chris: Now moving forward, we basically put ourselves on payroll…we weren't able to file for unemployment and get those $600 weekly payments that most people were getting; so as business owners, it did take quite a toll on us. It's very stressful not knowing when we were going to get some income to pay for our personal expenses. So, moving forward, we did make those changes.
Lupe: I agree, same mistake here. I'm not in the payroll, so basically I just did owner’s draw as needed. It was really hard not to get that money.
Chris: We're definitely revising the way we market our business; you know there's a lot of industries that didn't shut down. We started producing a lot of gummy products that went to companies that are making chamoy products with it—or even on the medical side, they're infusing the gummies. So, we started importing quite a bit from Turkey; we started exporting a lot of candy into Mexico. We’ve been doing quite well, as far as our sales go this month, but every week it’s different…we just have to be kind of conservative. It's hard because even with forecasting our product, the whole supply chain was interrupted when we closed.
Lupe: Right now, we can’t find Mexican Coke, or they're out of Don Julio products. And they also don’t have Modelo Negra (a brand of Mexican beer), which is one of our biggest sellers.
Chris: Both. So when we get it, the same day it goes back out. We have cash and carry in Downtown LA, so we sell to a lot of catering companies, a lot of food trucks. So they come down early in the morning, and they stock up their trucks or vans...so, it's a domino effect. If we can’t get it from the manufacturer, the distributor can’t get it, the wholesaler can’t get it, the retailer can’t get it and the consumer can’t get it.
Lupe: So do you have any Mexican Coke right now? Because I need some.
Chris: I'm supposed to get some this week, so I will call you as soon as they get it.
Lupe: I got the PPP loan, yes. And that was really good, because at that time, I remember Angie calling me; she said, “Mom, I have no money for food.”
I got the loan through East West Bank. I don't think I would have gotten it if it wasn't because of East West Bank, because I know other people had business accounts with other banks, and they were not getting it. And they couldn't believe how fast we got it.
Angie: I would just try to think [that] there's somebody out there who has it way worse. At least I have my home and I have my family, and you know, we're going to make it. So I just try to think positive, but I mean we're still going through it. We just are going with the flow and surviving at this point, but it's still there; it's still in the back of our minds 100%.
Chris: The main thing is just remaining positive…We all thought at first, okay it’s not that serious, but we were closed for three months. People live paycheck to paycheck; for us, we're living bill to bill. We have vendors to pay, we have creditors to pay. So it was very difficult. And though we're reopened, you're still going through the lost sales; it's not the same as it was before, so it's hard to forecast, it's hard to decide on certain things. So it's definitely still there, like Angie says, but at the same time we have to be very positive and hope that this goes away very soon, and know that we're not here alone.
Lupe: For the new entrepreneurs: Don't be scared. Just continue your dream. And don't give up on it. Just continue being positive and go after what you believe, and you're going to be okay. This is just something that happens, but it's going to go away.
Chris: I'll let you know when I get that Mexican Coke for you.
Angie: I'll make you the best michelada you’ve ever had.