One Year Later COVID-19: The Economic Fallout
Part Two of a Three-Part Series Since the beginning of the COVID-19 pandemic one year ago, not only lives but many businesses across the United States have been severely disrupted. While the virus has impacted every industry to various degrees, the hospitality industry, largely comprised of bars and restaurants, has been hit extremely hard. … Continued The post One Year Later COVID-19: The Economic Fallout appeared first on The Michigan Chronicle.
Part Two of a Three-Part Series
Since the beginning of the COVID-19 pandemic one year ago, not only lives but many businesses across the United States have been severely disrupted. While the virus has impacted every industry to various degrees, the hospitality industry, largely comprised of bars and restaurants, has been hit extremely hard. The National Restaurant Association estimates that 110,000 restaurants in the United States closed for good in 2020, most due to the pandemic.
In Detroit, many Black-owned restaurants were unable to survive the rollercoaster rides of COVID-19, even with carryout only services. With a series of Executive Orders issued by Michigan Gov. Gretchen Whitmer to slow the spread of the virus, an increased number of Black-owned restaurants found the orders of when to open, when to close and the number of patrons allowed in respective establishments led to spiraling profits.
“A restaurant closing for any length of time, longer than a week, can be a catastrophe, quite frankly,” Stephanie Byrd, co-owner of Flood’s Bar and Grill, The Block Restaurant and The Garden Theater, all located in Detroit, told The Michigan Chronicle last September. “And when you are talking about small Black businesses that don’t have the type of capital or that type of cushion to withstand a temporary closing, it’s very difficult.”
Byrd said Flood’s and The Block, which she co-owns with her sister Cristina, closed completely from March to June last year, in part because of the governor’s Executive Orders. Flood’s reopened first for carryout only services, followed by The Block in June. Both establishments are currently open and adhering to Whitmer’s early March 2021 Executive Order mandating that restaurants not exceed 50 percent capacity.
“At Flood’s we were able to get back to 50 percent capacity right away,” said Byrd., who is still contemplating when The Garden Theater will reopen. “At The Block, we are taking our time getting back, mostly because we haven’t been staffed up. Because of staffing, there are times we cut off at 30 percent capacity or 40 percent capacity.”
Not far from The Block is Yum Village located in Detroit’s New Center Area. Yum Village, an eatery inspired by West African and Caribbean traditions and dishes, has seen its business dip as much as 50 percent or more during the pandemic, after enjoying robust in-dining traffic before the onset of the deadly health crisis. With a steep dip in business, Yum Village changed its business model.
“We have evolved into an Afro-Caribbean marketplace environment to generate more revenue,” said Godwin Ihentuge, founder and chief villager of Yum Village. “At the moment, we do very little inside dining. We mainly sell fresh produce, coffee, teas, dry goods, our own authentic spices and herbs, candles, soaps, lotions, and freshly made juices, all generic to the African diaspora.”
Ihentuge added, “About 90 percent of our transactions happen online right now,” he said. “ but people can come in for the marketplace experience of shopping for our unique items and merchandise designed in-house. We are still here to push the cultures of the African Diaspora.”
And it’s not just Black restauranteurs that have experienced difficult times at the hands of the pandemic, Black entrepreneurs in other sectors have searched for ways to stay open.
Shannon Reaves, founder, owner and operator of Bath Savvy Naturals, was forced to evolve her business shortly after her location of nine years at the Rust Belt Market in Ferndale temporarily closed at the onset of the pandemic. Her company, which specializes in making and selling bath and body care products derived from natural plant-based ingredients, was forced to pivot.
“Our pivot was to take our products and sell them strictly online,” Reaves said. “Surprisingly, we were pretty busy, but it wasn’t the same as having our own store. Our goal is to open a store again.”
The transition presented other business problems for Reaves. She began reaching out to organizations with resources that could assist her company.
“We applied for and received PPP (Paycheck Protection Program) money, which allowed me to keep employees. And the next round of PPP will assist us in moving forward.”
Reaves said there lots of sources that can help Black small businesses, but must be aggressively identified, researched, and applied for. She cited the Michigan Women’s Foundation as a source where her company received a grant.
In a bid to help small businesses across Michigan survive, Whitmer, to date, has awarded $52.5 million to almost 6,000 small businesses through the Michigan Small Business Survival Grant Program. One of the businesses that benefited from the program is Fit4Life, a full-service fitness studio located on Detroit’s northwest side. Its owner, Felicia Maxwell, held outdoor fitness camps and classes in attempts to generate revenue for the business. However, she needed help, which she got as a recipient of the Survival grant.
“Until a large percentage of the population is vaccinated against COVID-19, I can’t get all of my clients back,” Maxwell said in a statement. “I’m dependent on grants and other assistance available to me. While I’m very thankful to be a Survival Grant recipient, I’d rather be fully back to business and helping my community get and stay healthy.”
The Detroit Economic Growth Corporation (DEGC) has been a major source for helping Detroit small businesses, especially Black small business owners – both before and during the pandemic.
“At DEGC, we do everything that we can to bolster our small businesses during this pandemic, especially for Black businesses which have been hurting,” said Pierre Batton, executive vice president of Small Business Services at DEGC. “In the last 12 months, DEGC is one of many organizations that understands the sense of urgency to assist our small businesses in Detroit.”
Batton points to DEGC’s Detroit Means Business initiative which was created to develop an infrastructure that connects small businesses to dozens of vital resources that exist for small businesses to grow. According to Batton, Detroit Means Business is comprised of 60-plus private, public and philanthropic partners ready to help the needs of Detroit’s small businesses.
“Detroit Means Business orchestrates the connections between small businesses to all the resources needed to help them get PPP (Payroll Protection Plan) loans and apply for grants, low-cost capital and technical assistance,” Batton said. “We have got to solve the small business crisis in Detroit if we are going to be successful in growing and sustaining our economy.”
One of the hallmarks of Detroit Means Business is its “one-stop-shop” website, www.detroitmeansbusiness.org.
“During the pandemic business owners were telling me that they had to go to 20 websites and had to figure out what’s real information from false information,” explained Batton. “They needed a trusted source, a website to go to and get valuable information like how they could apply for grants, what grants and loans were available, how to get technical assistance and more.”
Batton added. “DEGC will continue to get all the resources possible to help small businesses in Detroit, specifically Black and Brown businesses,” Batton said. “In the coming weeks, we will have more clarity as to what funding will be available to help small businesses through President Biden’s $1.9 trillion Stimulus Package.”
DEGC contracts with the City of Detroit and works closely with Mayor Mike Duggan’s jobs and economic development team, led by Nicole Sherard-Freeman, group executive of Jobs, Economy and Detroit at Work. In her quest to keep Detroit’s economy moving forward during the COVID-19 pandemic, Sherard-Freeman has brokered six new hiring agreements which give Detroiters “the first chance” at getting good paying jobs. The companies are Stellantis (formerly Fiat Chrysler Automobiles), Dakkota Integrated Systems, New Center Stamping, Flex-N-Gate, Spencer-Butcher and Universal Logistics.
“These are six employers who said, ‘We will look to Detroiters first to fill our jobs before we open up to anyone else,’ ” Sherard-Freeman said. “We are helping people of color in Detroit get the first opportunities that are coming as a result of large-scale workforce developments.”
However, Sherard-Freeman knows that to grow and sustain the local economy it goes beyond hiring Detroiters at larger companies.
“We must wrap ourselves around Detroit’s Black and Brown small business community,” Sherard-Freeman said. “They are one of the largest job generators in the city when you take them in their entirety. There are 60,000 registered small businesses in Detroit. And about 12,000 of those small businesses employ somewhere between two and forty-nine employees.”
The recipe for workforce development success, according to Sherard-Freeman, is strategically bridging and growing small and large businesses.
“When we are successful, it helps reduce poverty and close the income gap between Black Detroiters and white Detroiters,” explained Sherard-Freeman. “That’s the pathway forward for Detroit.”
Many businesses, economic and healthcare stakeholders agree that the pathway forward out of the pandemic is predicated on people receiving the vaccine to fight the coronavirus.
“We are encouraging our staff, encouraging our guests and encouraging our community to get vaccinated,” Byrd said. “I want to keep our community and our people safe. And the vaccine is how to get Black businesses back on track.”
“We are excited that the vaccine is ramping up, and we want our small businesses to take part in it,” Batton said. “The COVID-19 pandemic has really devastated the Black community. The vaccine is the light at the end of the tunnel for us, and we as a community must walk forward into that light. The sooner we are able to get everybody vaccinated and to be safe again, the sooner we can reopen and continue to grow our local economy.”