Lead Photo: Karen Allegretti, owner of Market Earth in downtown Fort Myers that carries socially responsible products, says, ‘ … I have every intention of staying around and hanging in forever.’
Easter normally means big business for Norman Love Confections, but the Fort Myers premium chocolate company knew Easter 2020 wouldn’t be normal. With customers unable to visit its four retail locations due to Florida’s stay-at-home order, the chocolatier had begun offering curbside pickup and delivery. However, they still had kinks to be worked out.
“I went into Easter conservatively, because you can’t sell [chocolate] eggs the day after Easter,” says chef, president and founder Norman Love. He produced just half of what the company had previously forecast for the holiday. “And much to our surprise, e-commerce did exceptionally well,” he says.
E-commerce had already been a growing part of Love’s business pre-pandemic. But with people stuck at home, even more customers became comfortable ordering online. So he took a bigger gamble for Moth- er’s Day, increasing digital marketing efforts. Another confidence booster? Improvements on the retail front after the company began using Square’s platform for processing curbside and delivery orders.
The gamble paid off, with Mother’s Day e-commerce purchases exceeding expectations. “It is the way of the future,” says Love. “So we’ll continue to work through how to grow that piece of our business.”
At the same time, Love expects to keep offering his newer systems for getting his chocolates into customers’ hands. “We’ll evaluate through the summer, which will help us get better at what we’re doing,” he says. “But I think I like it and people like it, so curbside pickup will continue. And if we’re able to efficiently and cost-effectively do it, delivery will be here to stay, too.”
COVID -19 has forced most local companies to pivot and adapt in order to manage the economic impacts of the pandemic and, in some cases, simply survive. Not surprisingly, smaller businesses—a sizable chunk of Southwest Florida’s economy—generally have bigger struggles.
“I think the coronavirus is an anti-small business virus,” says Christopher Westley, dean of the Lutgert College of Business at Florida Gulf Coast University, which has been producing monthly Coronavirus Economic Impact Reports for the Lee County Economic Development Office and Horizon Council. “They’re the ones more likely to feel the cost of it.”
In FGCU’s June report, conducted during the last week of May, 61% of businesses, regardless of size, believed the coronavirus’s adverse effects would be temporary. But even as things get better, some of the changes local companies have made will likely last long after the health threat.
Like Norman Love Confections, many local restaurants also plan to continue new curbside and delivery options (see sidebar). But the new ways of doing things go beyond that. And navigating these challenging times with creative thinking and quick pivots will help companies deal with the unknowns still ahead.
TRYING NEW PROCESSES
Companies have now seen that, in many cases, employees can do their jobs just as well from home. “Working from home will become more legitimized,” says Westley. “If a business had trust issues about employees working at home and not doing their work, I think they’re finding ways to get around that and it will become more normal.”
In FGCU’s June Coronavirus Economic Impact Report, 51% of respondents reported no change in the number of employees working from home since the start of the outbreak. Twenty percent of respondents said fewer than 20% of their employees have returned to the office, while just 17% of responding businesses had seen more than 80% of employees go back to the office. Three percent of respondents had even seen an increase in the number of employees working from home.
It’s working out so well for some businesses that they’re staying at home indefinitely. “I do not see us in any hurry to go back to the way it was,” says Tom Uhler, founder and principal at Uhler & Vertich Financial Planners in Fort Myers.
Dealing with past hurricane seasons helped the firm prepare for the current out-of-office shift. Employees all took home company-owned IP phones, and calls are routed just like in the office. “We had a disaster plan in place assuming it would be for a hurricane, and we simply pulled up that plan,” says Uhler.
Advertising agency Wilson Creative Group in Naples returned to its office in mid-May with staggered staff. “We missed each other, and everyone really wanted to have the tight culture we had when we were in the office,” says Peggy Wilson, the company’s president and CEO. “I think we’ll continue to be staggered through July, at which time we’ll make some decisions about how to move forward with a certain work-from-home sensibility.”
Companies that already had paperless systems made home transitions more easily, and firms that had to adapt quickly in this new world are unlikely to revert to old-school ways of paying bills or sharing files.
“Southwest Florida companies have gotten very creative on how to do things remotely, and I don’t think they’re going to step back from that,” says Karen Mosteller, partner at local accounting and consulting firm Markham Norton Mosteller Wright & Company. “I think fear stopped people from doing some of this. Once they get over it and set up the processes, they say, ‘Why didn’t we do this years ago?’”
Many businesses used the shut-down to tackle needed projects. At Holiday Inn Fort Myers Airport-Town Center, staff cleaned windows and pressure-washed, things the hotel would have hired out normally. The hotel also increased cross-training efforts, teaching food and beverage staffers how to work the front desk or help engineering with air-conditioning maintenance.
“Our team is all about that cross-training; they want to learn more,” says Brian Holly, the hotel’s managing director. “Our team members are going to come out of this way more well-rounded than when they went in.”
EMBRACING NEW OPPORTUNITIES
Some local companies found that it wasn’t enough to just rely on their existing customer bases. Fort Myers– based Creative Architectural Resin Products typically creates custom designs for homebuilders and developers. Anticipating that economic conditions could decrease new construction, the company began reaching out to two new markets: homeowners and HOAs.
“We needed to reinvent ourselves and find ways to change our hustle so we can stay afloat,” says co-owner Marilyn Santiago. “For homeowners who cannot buy a new home now or want to sell their home, we can help them improve their curb appeal by adding
architectural elements that improve the look of their house without breaking the bank.” The company can do the same for HOAs whose facilities need a refresh or more modern look.
New marketing materials and a restructured website got the word out about these new efforts. “It’s helping us get more diversified without changing our production capabilities,” says Santiago. “It’s a good time to be more competitive. Now’s the time to keep your eyes open.”
Accent Cleaning in Naples promoted its outdoor cleaning services to customers uneasy about letting anyone into their homes. “When people were at home and using those outdoor spaces so much more, it was a service people did feel more comfortable about,” says co-owner Steph Feightner.
Wilson Creative Group, which experienced a 40% loss in business initially before things began coming back, saw the benefits of a diversified client base spread out among industry sectors. It continues to look for new clients, offering incentives including a free web- site audit and packaged digital marketing services during the spring.
Fort Myers Brewing Company lost 68 percent of its business at the onset of the shutdown when local restaurants, bars and other sites no longer needed it to supply draft beer. “That’s a significant loss for any business,”
says co-owner Jennifer Whyte. “We lost some of our biggest weeks of sales. We have a tank full of beer we brewed specifically for Hammond Stadium, and now we’ll have to navigate what to do with that.”
But the brewery continued to release new beers during the spring, increasing the amount of canned product so that customers could easily take it home. “That’s one of the silver linings in this, I would say,” says Whyte. “Package sales out of our taproom have been incredible. We’ve always done to-go beer in growlers and had six-packs available, but we have more available now, and that’s something we’ll continue.”
Many of the businesses interviewed for this story received loans from the Paycheck Protection Program. “That was a lifeline—to bridge the gap of being fully open to being partly open to who knows what’s to come,” says Whyte.
And most of those businesses have been able to keep the majority, if not all, of their existing employees on staff. “We never doubted that we were going to go for [the loan], and we’ve used it exactly the way it was meant to: make sure our team members were getting paid,” says Holiday Inn’s Holly. “Our motto is [that] you take care of your team members first. If you take care of your team members, then they’re happy to come to work, and the guests will feel that.”
Sanibel Captiva Community Bank has helped secure more than 700 loans for almost $70 million for local businesses, working with both existing customers and businesses that weren’t clients but needed the bank’s help.
“People were being funneled to us from all different channels and directions, and it was not even a question,” says Amy McQuagge, the bank’s vice president/director of marketing. “Helping the community is at the foundation of who we are.”
The bank mobilized 25% of its staff to assist with PPP and loan forbearance efforts, including employees such as McQuagge with no previous experience in those realms. And even as it’s helping local businesses survive, the bank continues to grow, with its eighth branch and new Sanibel Island main office underway.
There’s still a lot we don’t know about what’s in store. Will there be more outbreaks of COVID-19? How long will an economic recovery take?
“We shut down at the very height of season, so it really impacted me financially,” says Karen Allegretti, owner of Market Earth, a boutique in downtown Fort Myers that carries socially responsible products. “I probably had about $65,000 of additional inventory over and above what I normally would, and it shut off like a faucet for me.”
Now Allegretti faces an uncertain future. “You plan for different seasons and different bands of customers, and we don’t know what that’s going to look like anymore,” she says. “I’m one of those people who, if we can’t zig, we zag, but this is very uncharted territory. But I have every intention of staying around and hanging in forever. Downtown is still growing; construction was happening the entire time we were holed up at home.”
While business activity may have shut off like a faucet, as Allegretti described, getting it flowing again won’t be easy. “There was an assumption from certain economists that we could shut down the economy by pulling this lever, and then when the threat changes we could push another lever and go back to where we were,” says Westley. “I think we’re going to find out that the economy just doesn’t work that way, and the recovery is going to take a while. How that affects our region is important: Historically when the U.S. economy falls into a recession, the state of Florida’s economy falls into a more severe recession, and Southwest
Florida is more severe than the state.” And local businesses don’t want to see that happen again. According to FGCU’s June Coronavirus Economic Impact Report, 52% of respondents said they would not likely support another economic lockdown in Florida if COVID -19 cases were to spike again. Business size was a factor here, with 70% of the large firms not likely to support another lockdown compared to 43% of small firms surveyed.
To deal with all the unknowns still ahead, Mosteller emphasizes the need for budgeting and forecasting. “If restaurants are stuck at 50% capacity, how long can they survive?” she says. “Will you be able to make up revenues or are those lost revenues, and what does that mean?” She also suggests businesses take another look at their estimated taxes for 2020 so they don’t overpay based on 2019 revenues. Westley hopes a conversation begins about the negative impacts of extremely low interest rates, which remove incentives for businesses and individuals to save money. “Those policies have really made our economy less able to deal with a crisis like this,” he says. “For me, a silver lining would occur if there is a legitimate discussion about this lack of savings.”
It’s well known how thoroughly coronavirus has devastated the restaurant business. The National Restaurant Association says the industry has lost more than 6 million jobs since the COVID-19 crisis began, and in an April letter to Congress, it stated 15% of America’s restaurants had either permanently closed or were likely to soon.
The list of local closures includes chains such as Sweet Tomatoes and independent spots including Agave and Green Cup Cafe. But many local restaurant owners are determined to do whatever it takes to ride this out.
“I will 100% survive,” says Bob Boye, chef-owner of Liberty in Fort Myers. The former chef-owner of Cru has already dealt with hurricanes and invasive construction projects. “It’s been this constant adapt, overcome and just figure it out,” he says. Boye already has tweaked his eclectic tapas menu—“It doesn’t work for to-go”—and created $5 takeout meals for folks feeling the pinch. His latest challenge? Finding affordable alternatives as beef, poultry and pork prices rise.
Greg Gebhard, co-owner of Nice Guys Pizza in Cape Coral, also totally shifted his business model when the shutdown hit—from a bar that serves pizza to a takeout joint offering pizzas and to-go cocktails. “We had to completely pivot in a matter of hours,” he says.
He’s cautiously opened back up and expects many changes to be long-lasting. “Delivery is something we will consider keeping,” he says. “Now the habit is staying home and getting pizza brought to your house, and when habits form, they’re tough to break.”
Gloria M. Jordan, owner of La Trattoria Cafe Napoli in Fort Myers, also sees the potential to continue takeout and delivery at her restaurant. “Maybe in the future, we can hire someone to do delivery for us,” she says. “Restaurants are important because we provide jobs for our community and the money stays in our town.”
Sandy Stilwell Youngquist, CEO/ owner of Stilwell Enterprises & Restaurant Group, had already learned the importance of building a strong team over her two decades in the business. Getting a PPP loan helped her pay valued staff as they pitched in with painting and other improvements at her Captiva restaurants during the shutdown.
“The neat thing about it was Keylime Bistro had its team and RC Otter’s had its team, but then suddenly we all became one team working together,” she says. “We got to know one another a lot better.”
BY THE NUMBERS
The number of loans the Small Business Administration has processed since the start of PPP, providing more than half a trillion dollars of economic support.
According to a monthly poll taken April 21-27, 2020, and released by the U.S. Chamber of Commerce and MetLife, the biggest concerns for small businesses are:
- a lack of profitability due to the decreased number of customers (54%) protecting
the health of their employees (36%)
- a resurgence of the outbreak forcing another shutdown (34%)
- challenges with implementing social distancing (28%)
In that same poll, 22% of small businesses said they are two months or less from closing permanently, and 80% of small business owners think it will be at least three months to a year before the U.S. small business climate returns to normal.
The percentage of National Federation of Independent Business members who applied for a Paycheck Protection Program (PPP) loan. Almost 90% of those have received the loan.
Small businesses employ 3.4 million in Florida, or about 42% of the state’s workforce, according to the Florida office of the National Federation of Independent Business.
In the eighth wave of the coronavirus survey co-sponsored by Thryv and America’s SBDC, which was conducted from May 4 through May 10, 28% of small businesses surveyed expect to be 100% recovered in a year, and 32% expect to be 75% recovered.