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While people stuck at home have turned to baking bread, sewing masks, and tilling the soil in recent months, three local business owners also have embraced a back-to-basics model with survival the goal.
Nationwide, consumer spending tanked in March and April as stores and businesses shuttered in the wake of the COVID-19 outbreak. Then as business slowly reopened in May, there was a healthy rebound that continued through June.
But as virus outbreaks surged in July, spending slowed again and small, locally owned businesses have been the hardest hit by this economic and public health roller coaster.
Though in July almost 90 percent of the nation’s small businesses had reopened in some capacity, according to a U.S. Chamber of Commerce survey, many have had to retool their products and services to match consumer behavior.
The recipe for survival isn’t total transformation, however. “The reality of how companies are dealing with the crisis and preparing for the recovery tells a very different story, one of pivoting to business models conducive to short-term survival along with long-term resilience and growth,” wrote Wharton School professor Mauro Guillén in a recent Harvard Business Review article. “Pivoting is a lateral move that creates enough value for the customer and the firm to share.”
“Certainly, pivot is the word,” said Ayse Derman, co-owner of Niche, a women’s clothing and lifestyle boutique at the Pearl. After closing in March, then reopening weeks later, Niche started making changes to the way it does business by limiting store hours and offering a new product: face masks.
The bigger pivot came Aug. 21, on the eve of the store’s 25th anniversary, when Niche debuted a new in-store concept, The Stitch at Niche, a curated fabric and notions shop.
“We are makers, and have been making on a larger scale, but with the new reality of what’s going on, we looked around and said we can support makers who are making things at home now,” Derman said.
The Stitch space in the clothing store displays more than 75 kinds of textiles in fine silk, linen blends, and knit jersey, as well as French Jacquards and brocades, prepared-for-dye linen, and unique buttons handmade of shell, horn, and wood. A limited selection of patterns, notions, and trims, and a mini-sewing kit for travelers also are available.
“As an apparel brand, we find that maybe people aren’t needing as many items of clothing as they needed before, since everything is Zoom and not so many parties … and all the things that we’re not going to, but we can certainly make things,” Derman said. “[Sewing] is a great skill, a great craft, and it’s a great pastime.”
Also at the Pearl, but closed due to state mandates, High Street Wine Co. has pivoted its business from wine bar to virtual wine tastings and classes and supplying the wine to go with them. But the owners have taken it a step further with a nonprofit labor program somewhat reminiscent of the Depression-era Works Progress Administration, which put unemployed people back to work on infrastructure improvement projects across the country.
When a customer purchases a select wine class or wine pack for pickup or delivery, a portion of the proceeds goes toward paying a High Street employee to volunteer in one of four local nonprofits, including the San Antonio Food Bank, the SA Hope Center, Meals on Wheels, and West Avenue Compassion.
High Street opened in 2016 with hospitality and education its focus, said Scott Ota, general manager and beverage director. By 2019, Ota and Mark Stoltz, founder and managing partner, had hit their stride and started working toward a second store that they hoped would open by the end of 2020.
“Then February and March comes around, and that changed everything,” Ota said. But they acted fast.
Within six days of closing in March, the owners and team had High Street’s wine collection posted online for pickup orders and delivery. “No one was making money but we weren’t losing too much,” Ota said. “And then once the [state] reopening happened, we saw our business completely plummet again” during the second shutdown and as people opted for restaurants.
“The nonprofit labor program is a way to give people more reason to support us,” he said. So far, it’s working. Business is creeping up again, and six High Street employees – those who were not laid off in June – are contributing about 30 hours a week to the organizations they collectively chose to support.
“Putting people to work in the right way was always the No. 1 goal,” Ota said. “Why would we pay someone to sit in an empty bar and just clean something? Let’s put them to work where the city needs it.”
San Antonio Healthy Vending owner Rubén Ayala started his business in 2014 after being inspired by a magazine article the Army veteran read during one of his two deployments in Iraq.
Ayala began with five vending machines, and after securing a contract with the YMCA of San Antonio, by 2019, Healthy Vending was supplying the vending needs for schools of all sizes and micromarkets for workplaces throughout the region. Ayala employed four people and had annual revenue of $500,000.
But when schools closed in March, the losses were brutal, he said. “Everything happened at one time. One week, we are operating at full capacity, the following week, we lost close to 80 percent of our revenues.”
Like many small businesses, the Paycheck Protection Program helped, but he wasn’t about to sit around waiting for more aid. “The only thing I know is that I was not OK with letting something like a pandemic take us out,” he said. “We worked too hard to get to where we are and we just had to fight.”
While caring for his three children at home, Ayala came up with a spinoff business plan. “The periods between 11 o’clock in the morning and 3 o’clock, they’re just ravenous – they just want to eat all the time and I don’t know what to feed them,” Ayala said. “You get tired of making grilled cheese sandwiches.”
His home delivery service of meals, snack packs, and beverages targeted at parents working from home launched Aug. 1. Business is growing slowly so far, he said, but he’s setting long-term goals for the delivery service, including applying to become part of government-supported food programs.
“What I would like to be able to do with this is to offer more staple goods and really be able to go into areas that a lot of these companies that do this really aren’t in,” he said.