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Is now the time to start a business? Pandemic spurs new Northern California ventures

Why women started businesses in the pandemic

• 58% wanted more control over their work schedule

• 24% wanted to start a business that they could pass on to their families

• 37% were looking to improve their financial opportunities

• 19% lost their jobs

• 9% didn’t have any other job opportunities

Source: Gusto, 2020

Help-wanted signs may be part of the pandemic’s legacy. But another could be the uptick in business license applications, as more seem to be warming to the idea that now is the time to stop working for someone else.

“People get extremely creative when things get weird. (Entrepreneurship) is not uncommon in times of severe economic turbulence. There is a history of those times producing a lot of new businesses because people were either laid off or it changed someone’s mindset regarding their career and life goals,” Mark Bodenhamer, CEO of Sonoma Valley Chamber of Commerce, told the Business Journal. “And a lot of people are moving geographically. It provides people with interesting life circumstances.”

In the last two years, thousands of people have started businesses in the North Bay, a phenomenon happening throughout the country.

“I am optimistic about this next year. I think the trend is more businesses will open. People are willing to invest and bounce back our economy,” said Bernie Narvaez, a Napa City Council member, president of the Napa County Hispanic Chamber of Commerce, and owner of Narvaez Insurance Services.

Narvaez sees the increase in local businesses in the last two years mirroring the rise in the number of customers he has who are seeking workers’ compensation insurance.

‘Would not have been home thinking what else he could do’

Ricardo Gonzalez opened his Los Agaves Napa restaurant just six weeks ago and business has been brisk in downtown Napa. (John Burgess / for North Bay Business Journal) Tuesday, March 15, 2022
Ricardo Gonzalez opened his Los Agaves Napa restaurant just six weeks ago and business has been brisk in downtown Napa. (John Burgess / for North Bay Business Journal) Tuesday, March 15, 2022

Ricardo Gonzalez was managing Bistro Don Giovanni restaurant in Napa when California shutdown in March 2020. Laid off for four months, Gonzalez had plenty of time to think about his future. He and his wife, Cristal Villasenor, noticed food trucks were still operating, and most were bringing in a steady stream of cash.

By August the couple was operating Los Agaves Napa food truck. A year later they signed a multi-year lease on a downtown Napa brick and mortar location for a restaurant by the same name.

“I think the pandemic made his dream a reality. Without the pandemic, he would not have been home thinking what else he could do because he had a full-time job,” Villasenor said of her husband. “Yes, it was his dream to have his own restaurant, but it was not something he was actively pursuing.

“We are Mexican, so we know good Mexican food. We use a lot of recipes from our families.”

The restaurant along the Napa River opened for lunch and dinner on Jan. 21 and has been sold out every weekend. Many of the Los Agaves Napa food truck aficionados are restaurant diners, and many of those who worked on the truck are employees at the restaurant. For now, the truck will be reserved for catering.

“I do all the paper work, make sure it is profitable, that the bills get paid, all the licenses are up-to-date and he handles all the operations,” Villasenor said of the division of labor at the restaurant.

Villasenor has owned Elite Financial accounting firm in Napa since 2013, so she is well versed in all things numbers.

‘Perfect time to segue to a new business’

Carolyn Rebuffel Flannery, founder of Make It Home, is surrounded by donated chairs. (Eric Zepeda photo)
Carolyn Rebuffel Flannery, founder of Make It Home, is surrounded by donated chairs. (Eric Zepeda photo)

For Carolyn Rebuffel Flannery, the chaos of COVID-19 became the cure for her unhappiness.

In October 2020, she started the nonprofit Make It Home. Based in San Rafael, serving Marin, Sonoma, Napa, Solano, San Francisco, Alameda and Contra Costa counties.

The charity serves people in Marin, Sonoma, Napa, Solano, San Francisco, Alameda, and Contra Costa counties. Two staff members receive a paycheck, while volunteers put in the bulk of the hours. Flannery would like to be big enough one day to hire an executive director and perhaps more employees.

Her business is like a food bank, except instead of food being donated and then given away, it’s furniture. Thus the reason Flannery calls it a furniture bank.

“We actually provide furnishings to anybody and everybody who is in crisis who we can help,” Flannery said.

The pandemic exacerbated what people need because many have been uprooted by landlords or lack employment and need to move. In the first 16 months, Make It Home has helped 450 households, according to Flannery.

Donations are stored at Northgate Mall in San Rafael at an 11,000-square-foot space that was donated.

“For me the pandemic was the perfect time to segue to a new business. I was frustrated and not super happy doing interior design. I’d been doing it for 25 years,” Flannery told the Business Journal. “I was seeing all of this waste, which was ridiculous, and the need was ridiculous. So the waste was going to solve the need problem.”

The waste was in the interior design industry, where a client may decline a scratched table, but it’s cheaper for the vendor to donate it than have it shipped back.

“Furniture poverty is not something that is recognized or discussed. If you are given a (government issued) housing voucher, you have a house, but if you don't have a bed, a dresser or lamps or sofa or anything to cook with, you are warmer and safer, but you are not there yet,” Flannery explained. “We get a ton of household goods so we can give toasters, sets of dishes, pots and pans. You can’t believe what people in Marin will give away. We got a brand new Kitchen Aid mixer in the box. We have pieces of art, we have 30 jute rugs, and 50 dining chairs.”

North Bay entrepreneurship by the numbers

Business license data from six North Bay cities suggest people continue to want to work in this region.

Novato, Napa and American Canyon issued more business licenses in 2021 than they did in 2019 or 2020.

“Anecdotally, we’re probably seeing similar trends that have been showing up nationally during COVID,” Will Morat, senior analyst for Novato, told the Business Journal. “A) some loss of small businesses that were forced to close, b) an influx of new small businesses as people joined the Great Resignation and began starting their own businesses, c) large influx of contractors — many from out of town — seeking business licenses in order to take on home improvement projects in Novato as many people renovated or improved their homes during COVID — in some cases, to accommodate a new home-office, and d) hospitality industry taking the biggest hit from COVID — restaurants, cosmetics/beauty services, etc.”

An uptick in various contractor sectors was not limited to Marin County. American Canyon in Napa County saw these types of licenses increase dramatically from 2020 to 2021. Here’s what that city reports:

  • 19 of 60 electrical contractor business licenses in 2021 are new.
  • 27 of the 103 general building contractors are new.
  • 16 of the 33 roofing contractors are new.
  • 7 of the 24 HVAC applicants are new.
  • 5 of the 45 plumbing contractors are new.
  • 5 of 14 solar contractors are new.

American Canyon had 347 business licenses in 2019, 377 in 2020, and 1,103 in 2021.

“I think the increase in business license applications was due in part to people losing their job at the start of the pandemic and then starting home businesses to help with their income,” said Kelsey Canziani, accounting assistant with American Canyon.

She agreed with her Novato counterpart that the increase in contractors has to do with people renovating their homes.

San Rafael, Sonoma and Santa Rosa saw the total number of business licenses decrease in 2020 and 2021 compared to 2019. Even so, plenty of new businesses came on board.

San Rafael and Sonoma pointed to the pandemic for the overall loss of businesses.

“I attribute the decrease in business license renewals to the impacts of the COVID-19 pandemic. 2019 was a pre-COVID year, 2020 and 2021 have both been years heavily impacted by the COVID-19 pandemic,” said Danielle O’Leary, San Rafael’s economic development director. “The industries most impacted remains fluid, but in general, any businesses that rely on in-person service are the most impacted because of COVID. For San Rafael, that is restaurants, personal services, child care, and retail.”

The city of Sonoma in 2019 issued 2,456 business licenses, while in 2020 it was 2,236 and in 2021 there were 2,188.

“We believe that the business licenses will slowly increase from the 2021 numbers as more businesses reopen following the pandemic,” said Liz Garcia, Sonoma’s deputy finance director. “We use the chamber of commerce for economic development. The chamber is always trying to attract new business to the city.”

What national data show

Nationally, the new business license application record of 4.4 million set in 2020 was eclipsed in 2021 with 5.4 million applications, according to the U.S. Census Bureau. For comparison, in 2019 there were 3.5 million new business applications in the U.S.

The Census Bureau estimates one-third of the businesses are expected to hire workers.

Salesforce last year released a study titled “How the Pandemic Inspired a New Generation of Entrepreneurs.”

Diversity of startups was noted in the report, which looked at businesses that started in 2020 and early 2021. “The pandemic didn’t create a specific business size or type. These startup founders represent most industries and regions across the U.S. They have diverse funding sources and company sizes.”

Here’s what Salesforce heard from survey takers about what they thought were the most important qualities of an entrepreneur:

  • Creativity
  • Critical thinking
  • Good communication
  • Flexibility
  • Industry knowledge

Trail blazing in small business

Here’s what a national survey of people who started businesses in 2020 and early 2021 found:

• 56% of entrepreneurs said “now” is a better time to start a business than before the pandemic.

• One-third of startup founders started “essential” businesses during the pandemic.

• More than half funded their businesses with less than $10,000.

• 77% of companies founded during the pandemic are more technology-based.

Source: Salesforce

“Passion seems to be a defining trait among this generation of entrepreneurs. The majority of founders (57%) reported being driven by a desire to be their own bosses,” the Salesforce report says. “Many of the founders who participated in the survey had a desire to go into business for themselves long before the pandemic. Lockdowns and pandemic-related restrictions may have created the opportunities those founders needed to leave their old jobs and strike out on their own.”

North Bay Business Journal researcher Michelle Fox contributed data analysis from the North Bay cities.

Why women started businesses in the pandemic

• 58% wanted more control over their work schedule

• 24% wanted to start a business that they could pass on to their families

• 37% were looking to improve their financial opportunities

• 19% lost their jobs

• 9% didn’t have any other job opportunities

Source: Gusto, 2020

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