Small businesses took risks during the pandemic and many knew how to adapt

In August, after months of running her small event production business on 80% less revenue than normal, Hyacinth Belcher decided to consume a little more capital.

His company, Onstage Systems, organized and produced a live concert series called Capricorn Drive-In for two months every weekend, where local artists performed and the public attended in their vehicles at Fair Park.

Drive-in gigs were a different kind of investment, an opportunity for Onstage Systems to employ rested employees and “have something to do during that horrible experience in this live events business,” Belcher said.

The company’s initiative also had a multiplier effect, since it generated work for the musicians, janitors, security guards, parking attendants and other personnel who worked in the park during the events.

In addition, it unleashed a chain reaction. Radio stations took notice and started hosting drive-in events in Fair Park as well, Belcher said.

Small businesses with fewer than 500 employees, like Belcher’s, have been an integral part of the Texas economy for the past decade, employing about half of all Texan workers and driving innovation in cities like Dallas.

Small businesses “can take risks that large companies can’t because the numbers don’t look good,” Belcher said.

Onstage Systems is one of the fortunate companies that have survived a pandemic year by cutting their staff and transforming their business model.

But as of April, about 27% of all small businesses operating in Dallas in January 2020 were still closed, according to data gathered by Opportunity Insights, a Harvard nonprofit.

The ability of Dallas small businesses to recover in the coming months and years could hinge on improved consumer mobility and continued relief efforts.

Nationwide, 77% of surviving small business owners plan to exhaust their second round of Wage Protection Program (PPP) funds by the end of June, and most are confident that their business will survive.

But only 1 in 4 entrepreneurs – 26% – is confident that they can maintain their current payroll level without receiving further government assistance, according to a Goldman Sachs survey conducted in April among thousands of small entrepreneurs.

Dallas Mayor Eric Johnson said the city’s small business continuity fund, instituted to deal with the pandemic, provided $ 5.6 million in grants to 539 businesses and $ 1 million in loans to 32.

The fund was intended to help businesses that have annual revenues of $ 1 million or less.

It also provided assistance to more than 200 African-American businesses, Johnson said.

“We will continue to look for other ways to directly support small businesses going forward,” the mayor said in an emailed statement.

“But most of the assistance will come from the federal government or federal funds given to the city.”

Federal aid during the pandemic was the salvation for small entrepreneurs struggling to defray the expense of continuing to employ their workers … those who managed to obtain it.

Dallas businesses received billions of dollars in assistance from the federal Small Business Administration (SBA) through programs like PPP and Economic Injury Disaster Loans.

In addition, the private sector mobilized to get and distribute aid to troubled small businesses.

For example, the Communities Foundation of Texas, partnered with the Dallas Entrepreneur Center Network to provide millions of dollars primarily to small businesses owned by women and minorities.

“That money was raised and contributed by large companies and people in our community, because they know that small businesses are the lifeblood of our economy, and that if we don’t do something to help them, our economy is going to suffer,” said Trey Bowles, co-founder of DEC Network.

Bowles, who has worked in entrepreneurship in Dallas for the past decade, admitted that not all small businesses are going to survive.

In the case of Onstage Systems, Belcher’s assistance ran out at the end of April.

“At first we thought this would be over in about three months, but it wasn’t over, and things just got worse,” Belcher said. “We still need money.”

In late 2020, Johnson determined that startups were one way Dallas could foster jobs and innovation in the future.

To do this, he organized a task force that would map out a plan between Dallas’ public and private sectors to attract, retain, and support small businesses in their early stages of growth.

The commission designed a 10-year roadmap to, among other things, locate paid liaisons in municipal government offices that represent venture capitalists and entrepreneurs.

Small businesses generate up to 60% of new jobs each year in the country.

The pandemic hit small businesses in densely populated urban areas on the East and West coasts harder than those in central states like Texas, an Intuit Quickbooks study of small business bank deposits found.

But there are reasons to be optimistic.

Restrictions are being lifted, vaccination is accelerating, and small businesses across the country are on the mend, albeit unevenly.

Small businesses that have close contact with the public and their customers are recovering more slowly than those that do not serve the public directly, according to the study.

On average, Dallas small businesses were still earning nearly 30% less revenue in April 2021 than before the pandemic, according to data from Opportunity Insights.

It’s better than the situation in April 2020, when government restrictions, consumer fears of the virus and other factors caused a 50% drop in revenue.

The Dallas economy is projected to grow faster than the national rate in the coming years and that small businesses will play a role in that growth, says veteran Waco economist Ray Perryman.

Dallas Was One of the US Metropolitan Areas Where Small Businesses Created the Most Jobs in April, According to Paychex | IHS Markit Small Business Employment Watch.

“For those who can adapt to changing circumstances and get the workers they need, the prospect is great,” Perryman said.

“On the other hand, the economic expansion will exacerbate the labor shortage, which will cause problems and an increase in outlays on wages and salaries.”

In the spring of 2020, Dallas’s Fluellen Cupcakes “took a nosedive,” according to owner Keith Fluellen.

Fluellen ended up closing two of its three locations in Dallas-Fort Worth and taking on the job of chef himself.

“Now I have more money in the bank than I ever had with three stores, and fewer headaches,” said Fluellen.

The accountant by trade said the SBA’s two assistance programs – PPP and Economic Disaster Injury Loan – helped keep his business afloat during 2020, and he believes Fluellen Cupcakes could be ready to grow again. early 2022.

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