Northern California small businesses try to hold on as economy locks down again to slow the coronavirus

JEFF QUACKENBUSH
THE NORTH BAY BUSINESS JOURNAL

During a typical holiday season, the streets of downtown Napa would be bustling with shoppers, and they would be filtering into the First Street storefront for Miyamo.

But not in this year.

Becky Anderson, who has run the women’s clothing boutique for 16 years, reflected a positivity that has grown since summer for owners of small businesses nationwide in a recent survey.

“I think we’re OK, as long as we can stay open,” said Anderson, who employs four.

Miyamo was closed for three and a half months at the outset of the pandemic.

The U.S. Small Business Administration’s Payroll Protection Program loans helped Miyamo pay utilities bills and essential invoices, but the pandemic’s impact on tourism that is the lifeline for Napa Valley businesses has been hard, Anderson said.

“And all of the help has run up, and now, there's not a lot of programs available,” she said.

Meanwhile, debate over the next round of small-business relief continues in Congress, with discussion now of a nearly $1 billion package.

MaryAnne Petrillo, CEO of West Development Co., which runs Small Business Development Centers in Mendocino and Lake counties, said waiting up to two more months for help is a lot to ask for tiny firms that are barely holding on.

“It’s not going to be enough, given how long this is going to go on,” Petrillo said.

Mendocino County recently awarded $500,000 more in small-business grants to help companies stay afloat, and the county is working on a 10-year economic resilience strategy that involves new public-private programs and potential business-friendly policy changes.

Businesses more likely to survive are those with savings or equity to tap, but the “emotional fatigue” of seeing a longtime business suffer is wearing on local entrepreneurs, Petrillo said.

Small business owners nationwide in the fourth-quarter Wells Fargo/Gallup survey were more optimistic in November 2020 about their current financial situation and the prospects 12 months ahead, but their view of the present and future remains well below what it was at the beginning of the coronavirus pandemic. (Wells Fargo/Gallup image)
Small business owners nationwide in the fourth-quarter Wells Fargo/Gallup survey were more optimistic in November 2020 about their current financial situation and the prospects 12 months ahead, but their view of the present and future remains well below what it was at the beginning of the coronavirus pandemic. (Wells Fargo/Gallup image)

For the 600 small-scale proprietors who responded to the Wells Fargo/Gallup Small Business Index fourth-quarter survey, taken just after the election (Nov. 6–13), optimism was up for the first time of the pandemic but still was at levels half of where they were a year before.

Like Anderson, 69% of the respondents said their company’s current financial situation was “good” or “somewhat good,” and that level went up to 73% when they were asked for their outlook on 12 months from now.

But the owner of Miyamo was more tentative on her outlook.

“I'm sure sales are going to be down,” Anderson said. “I'm sure tourism is going to be down. But we're just trying to stay hopeful. And hopefully, there's enough people that still come to the valley and enough people that still want to support local businesses.”

The shop has survived because of what she said is a strong following of customers, but she’s worried that with more shutdowns of business sectors that those shoppers may not be able to keep supporting retailers like her.

Nationally, 46% in the Wells Fargo/Gallup survey reported decreases in revenue this year, but 53% expect revenue to increase over the next 12 months. Only 23% said they invested investing in their businesses this year, and just 13% reporting adding employees. Yet for the next 12 months, the survey-takers were more hopeful, with 30% investing in their businesses and one-quarter adding employees.

Petrillo said that from the proprietors her firm has talked with and helped, their current condition and outlook is divided between businesses deemed essential to remain open in the pandemic, such as grocery stores, and those labeled “nonessential.” Essential businesses tend to be having a hard time finding enough job candidates, while other firms are even more hesitant to hire than they would be in the fourth quarter. But she’s concerned about unemployment help running out for those furloughed.

Outside of essential sectors, Petrillo expects revenue declines for local firms of at least 30% for 2020. There was a bounceback for lodging businesses in the heavily tourism-dependent Mendocino and Lake economies, with measures to emphasize safety helping those businesses to recover faster and more in the summer. But with the virus resurgence this fall, the fortunes of that sector are troubled, she said.

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at jquackenbush@busjrnl.com or 707-521-4256.

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