Small businesses face devastating losses as pandemic causes closures, reduced hours

Open this photo in gallery:

The rapidly spreading new coronavirus is causing small businesses to take dramatic steps, from slashing hours and service to temporarily shutting down operations, as fears of the pandemic and the number of cases grows across the country.

The business moves have been swift as information on the virus and government actions change almost by the hour. Businesses that just days ago were aiming to reassure consumers about their cleaning and sanitizing protocols are now closing or drastically changing their operations.

For example, some gyms and yoga studios have closed or reduced their class sizes over the weekend, retailers cut their opening hours and events, and coffee shops have eliminated common areas where customers can get napkins or add milk or sugar to their drinks.

“Everyone is struggling with what to do right now and the best thing to do for their employees, their customers and the continuity of the business,” says Dan Kelly, president of the Canadian Federation of Independent Business (CFIB). “I’m hearing real struggles from business owners trying to prioritize it … If this last months and months, and social distancing is a big part of it, this will be calamitous for small-and medium-sized businesses.”

Some of the business decisions are being made due to feedback from customers, while others are mandated by governments. For instance, the Quebec government on Sunday ordered non-essential businesses such as bars, gyms, movie theatres and ski hills to close as COVID-19 cases continued to rise in the province, and suggested restaurants limit their capacity by 50 per cent to help fight the spread.

Toronto-based Alpha Health Services, which provides physiotherapy, massage therapy and rehabilitation services, is taking “extreme caution” in its already rigorous sanitization process and following Toronto Public Health guidelines on how to operate during the pandemic, says owner Charlotte Anderson.

“It’s about what we can do to do our part to keep this as under control as possible and to keep our patients and staff healthy and safe,” Dr. Anderson says.

Over the weekend, the business began prohibiting patients from sitting in their waiting rooms before and after their appointments and is taking many payments over the phone instead of in person. Dr. Anderson says the business is also having to adapt to what patients need for their recovery “while in isolation, stranded overseas, or in an immunocompromised state” and has started doing some over-the-phone rehabilitation services where possible, and is offering home visits if requested by patients.

Meantime, its costs are soaring for critical supplies such as hand sanitizer and other cleaning products required to keep the business operating. For example, Dr. Anderson recently paid $60 for a bottle of hand sanitizer purchased from another business owner, three times as much as the regular price. She tried to buy supplies to make her own hand sanitizer, but they were sold out.

“I am worried sick right now trying to figure out how to continue to address my patient needs, support my staff, and manage my business through this crisis, while keeping them all safe.” Dr. Anderson says.

The economic implications are also keeping her up at night.

“We can weather a shutdown for a while but, I have rent to pay, staff to pay [and other bills] and I am worried about what this means for me as a small-business owner if this extends on for months,” she says. “The ripple effect for my patients, my staff, my business, our health-care system and our whole economy is huge.”

True North Climbing at the Downsview Park Sports Centre in Toronto closed on Friday amid fears of the spreading coronavirus. Owner John Gross said he made the decision after Ontario announced it was closing schools for two weeks after March Break to reduce the spread of the virus.

“In a climbing gym, the main thing you are doing is touching climbing holds that someone else just climbed over and breathed on and there’s no way for us to continuously sanitize those,” says Mr. Gross, whose business is set to celebrate its 10th anniversary later this month.

He says most of his customers are supportive of the closing, even as some other climbing gyms remain open.

"I know some people think I overreacted, but I feel I had to do this," he says. “It’s hard and it hurts and it will have a very severe financial impact on my business ... but I felt I had a responsibility to not open the door to the risks [of continuing to operate]."

Mr. Gross is trying to keep some of his staff busy doing planned renovations and is looking into government programs being offered to help workers who lose income due to business closings or self-isolation requirements.

“I am going to take care of the people who rely on this income to live and eat as long as I can.”

Michael Helm, owner of the Breakwater Cafe Bistro Bar at the cruise-ship terminal in Victoria, says he has a plan in place to slim down operations if business slows, which he’s expecting due in part to cancelled sailings for the next few months.

“The cruise-ship passengers are a small percentage of our clientele but they’re still important,” says Mr. Helm, who owns the business with his brother Adam. “No cruise ships until July will surely impact our May/June sales.”

Mr. Helm says the number of large party bookings has dropped in recent weeks. “Every weekend, we have at least a couple large party bookings and I haven’t had any for about two weeks,” he says. “It might be social distancing at a micro level.”

The B.C. government’s move to mandate cancellation of gatherings of more the 250 people could also jeopardize the company’s business providing music and food to the Greater Victoria Harbour Authority’s Breakwater Barge, an annual summer music series. The barge has a capacity of 425 people.

Meanwhile, the restaurant is stepping up its efforts to clean and sanitize the premises, including asking servers to wash their hands more frequently between serving tables. Employees who have cold and flu symptoms are asked to stay home. The business also has a plan to curtail the menu and service in case staff can’t make it in.

“I hope our customers will understand,” Mr. Helm says.

Small businesses are doing the right thing by closing or scaling back operations, Mr. Kelly of the CFIB says, but worries about the long-term impact.

“There are many businesses that just aren’t going to make it as a result of this,” Mr. Kelly says. “Despite all the great contingency planning they might have done, temporary closure will likely mean permanent closure for thousands of businesses. That’s the balancing act we are facing.”