CLEVELAND, Ohio — A test prep service and a chiropractor are struggling. A clothing shop is optimistic, while making custom masks to help get by. And an RV business is booming.
Cleveland.com spoke with 15 Northeast Ohio businesses that in August signed an open letter to Congress, requesting more federal aid to cope with the shockwaves of the pandemic. Exactly how they’re faring during the pandemic is different, but as it stretches receiving more federal relief would be helpful for most.
“Small businesses were affected greatly, depending on what industry you’re in,” said Rob Scott, regional administrator for the Small Business Administration. “Obviously, some industries like the hospitality industry, like the restaurant industry, are seeing different effects from say a manufacturing company or a service industry.”
During a July survey from Goldman Sachs, only 36% of small businesses said their business could last through another shutdown.
The Cleveland businesses that signed the letter are part of Goldman Sachs’ 10,000 Small Businesses Voices program, which brings businesses together to support helpful policy changes.
The businesses that signed the letter, which ran in The Plain Dealer on Sept. 2, received forgivable loans through the federal CARES Act’s Paycheck Protection Program in April. They used the loans to maintain their payroll, hire back employees who may have been laid off or cover applicable overhead. Some used it for rent, health insurance, water and other bills. But the PPP ended Aug. 8. And the economy is far from roaring.
“At the most basic level the funds were designed to help people retain employees at small businesses with a time limit on the funds, the ability in many industries to go back to putting people to work and resuming operation didn’t happen as quickly as everyone hoped,” says Scott Shane, a Case Western Reserve University professor of entrepreneurial studies and economics.
Did they work? Business owners say yes. But exactly how well depended on the industry.
Scott says it’s up to Congress to address the issue — possibly with a second round of PPP for industries that need it.
According to a September survey from Goldman Sachs, 88% of small business owners in 47 states and three U.S. territories have exhausted their PPP loans.
Here are 15 Northeast Ohio companies that signed the 10,000 Small Businesses letter, and how they’re doing.
Dr. Pooja Patel says she feared Core Life would have to shut down after the pandemic initially broke out. “I was scared honestly, we didn’t know the stakes like the whole world,” says Patel.
However, since the chiropractic business was deemed essential, Core Life was able to remain open.
Still, the chiropractic office in Shaker Heights is seeing about half its regular business.
“It’s been bad,” said Patel.
Core Life received enough PPP money to last until mid-August. Now, the business is only doing just enough to stay afloat.
As the pandemic rages on, Patel is uncertain of Core Life’s outlook for the future. “Honestly, we don’t what is going to happen or what things are going to look like. Everything is constantly changing,” says Patel.
Dallas Riffle is the president and creative director of Dallas Riffle Media, a marketing and advertising agency in Fairview Park. His company received the PPP money “by the skin of our teeth,” and the entire loan was used to maintain payroll. No one had to be laid off, and Riffle has hired an employee and plans to fill another short-term position or two.
As the pandemic continues, Riffle could envision applying for another phase of PPP, if it’s offered, to add financial insurance if the state of affairs swings again.
“We have large clients that went from killing it with their revenues to having literally zero revenues overnight,” Riffle said. “So it was scary; it was quite scary. When you’re a small company, and you work for large companies, and those large companies suddenly get shut down, that will put your heart in your throat.”
Melt Bar & Grilled is one of the company’s clients, and Riffle recalled speaking with restaurant owner Matt Fish about how he’d help them push through the pandemic, which shut restaurants for weeks before allowing them to open at lower capacity.
“That was kind of the thing, you had to just be willing to change, willing to pivot and willing to put in extra hard work,” Riffle said.
Davide Cotugno says he and his family will not sacrifice their reputation of producing quality suits, custom jackets, tuxedos, and casual wear amid the pandemic.
The Brecksville company is also making masks.
“That’s what people are looking for,” said Cotugno, the president and owner of Davide Cotugno Executive Tailors. “And just because the economy is the way it is, we don’t feel like that we should be cutting the quality down just to get the price down. That kind of goes against our brand.”
The pandemic closed the shop until the beginning of June. Davide Cotugno received a PPP loan in May, which helped maintain payroll and pay rent and utilities.
As business starts to pick up, Cotugno is looking ahead to the holiday season.
“We’re more positive than we were like a month ago or two months ago for that matter,” Cotugno said. “So things are picking up, but as we get closer to the holidays and into January when things slow down again, we don’t know where we’re going to be. Definitely, another stimulus package would certainly help to make our cash flow a lot better.”
Die-Mension Corp. President Karen Thompson says the Brunswick company needs more financial help as the pandemic continues.
The tool and die manufacturer and metal stamper makes consumer products such as appliances and electronics, as well as supplies for the automotive industry. It’s lost half its sales, Thompson said.
“Our sales have plummeted because when they shut plants down all over the world, that included our customer base, so orders were pushed back by at least two months,” she said. “Sometimes, more for some of the customers. The work hasn’t really picked back up that much.”
Die-Mension Corporation received $148,600 in PPP money, and it used most of it for payroll. About $21,000 of it was used for rent, health insurance, gas, electric, and other bills. Thompson said once the PPP money ran out, six people had to be laid off — half the staff.
She and her husband, Rick, haven’t had a salary since the PPP loan ran out June 12 and are using some savings.
The company’s sales rep is seeking government work, but hasn’t had success yet.
“It’s scary,” Thompson said. “If the work doesn’t pick back up, definitely our staff is going to have to be cut.”
Principal architect Jeffery Meyers said the Cleveland company took a big hit initially.
“COVID has really impacted our business,” said Myers.
Myers said over the last six months the company’s production dropped to about 40% of expectations.
DS employees quickly transitioned to working from home. .The PPP funds DS received allowed the company to avoid lay-offs. The business is now projected to be back at 100 percent production before the end of the year.
Before the pandemic hit, Howard & O’Brien Executive Search founder Lee Ann Howard and her colleague Tina Darcy had solid business. Hires and opportunities were plentiful at the end of 2019 and heading into this year.
Howard’s company, which is based in Pepper Pike, works to find executives for companies, such as the Cleveland Museum of Natural History, the city’s federal reserve bank and Petco.
Once the economy skidded in March, companies weren’t looking to hire. Howard & O’Brien kept working, but uncertainty abounded.
“April and May, no one really knew what was going on or what to expect, so cash became king,” Howard said. “So unless you had to hire somebody, you were probably more likely to wait and see what was going to happen from the pandemic as well as the economic slow down on top of it.”
Business picked up in June, with a bit of a backlog. She said when hiring started back up, companies searched for people who have soft skills such as crisis experience and grit.
As the pandemic continues, Howard is trying to stay positive. She’s determined to help her company perform at a strange time.
“I do think that our firm is really all about the glass being more than half full and finding joy every day in some of the little things that happen,” Howard said. “And keeping the balance in your life. Making sure that you’re taking care of yourself. You’re eating right, you’re exercising. And that you’re surrounding yourself with things that balance out the negativity that’s out there right now.”
Kaeden Publishing, an elementary education publisher in Westlake, did not fare well at the outset of the pandemic, said president Craig Urmston.
Urmston said when most public schools shut down, Kaeden “saw a complete withdrawal of sales.”
Thankfully, the company had started converting to digital content in October 2019. More digital content would be needed as students studied virtually. Kaeden used the PPP money to continue developing the digital content, as well as to maintain payroll.
“And as a result, we now have some digital offerings that we have that are coming back, and schools are now purchasing the digital content,” Urmston said. “So that has made a difference to us because schools, if they’re not back in session, they don’t necessarily need books.”
Kaeden’s staff worked remotely until early May. Since June, Kaeden has been offering digital content to schools, and the company has received good feedback.
Still, Urmston said with some schools still operating virtually, Kaeden hasn’t returned to pre-COVID revenue levels. The company laid off one employee, and it may have additional layoffs if the government doesn’t provide more financial support.
Urmston would like more leniency in debt restructuring, as well as liability protection, in case someone falls ill from COVID-19 at the office.
“At this point in time, we’ve used all of our PPP money for payroll, so forgiveness is not an issue for us, but there’s a lot of paperwork involved in filing all of that,” Urmston said. “And additional funds through the PPP that will help us tide through the end of December until kids return back to school, and our markets start to open again.”
The family-owned RV dealership and rental company in Lorain had to shut down for April.
“I can pretty much say I cried every day,” says Angela Dudziak, general manager, and part-owner. “How am I going to keep my employees employed?
When the state began to reopen in May, the business did, too.
Neff Brothers predicted the pandemic might cause a surge in service work for RVs, and since Neff also provided that kind of labor, Dudziak believed the business could recoup.
After several marketing campaigns and collaborations, Neff began to see an uptick in new customers.
“It was just every newbie that never rented an RV from that point, from June 1 on. Literally, 95 percent of my renters this summer have never done this before,” said Dudziak.
After campgrounds opened, the business saw an even more significant jump. “When June hit and these people went RVing, we went off the charts. We’ve had our best year ever,” says Dudziak.
She says the company is 200% up over expected revenue.
Dudziak did go after the PPP loan when Neff shut down services in April, providing relief to pay bills and employees.
“Fortunately for us during COVID, the sun is shining right now–we are doing very well during other people’s hardships, which is sad you have to say that, but I’m happy I’ve got my employees that I’m able to put to work and put food on their tables,” says Dudziak.
Lisa Falkenstein committed herself about eight years ago to being a postpartum doula, who supports birthing persons emotionally, educationally and physically. She started Nurtured Foundation in 2014.
In March, the foundation had a slowdown, much like many other businesses.
During the pandemic, though, families with newborns were concerned about having outsiders in their homes. Some clients stopped their service or canceled upcoming contracts.
“Once the summer started, and kind of the initial shock of the pandemic wore off, we started getting more and more inquiries,” Falkenstein said. “And people felt like they needed the service even more because their families couldn’t travel to come to help them and support them.”
Falkenstein and her colleagues communicated with families about potential symptoms, leaving it up to families to decide whether they want a doula in their home. Nurtured Foundation also asks families questions about whether they want them to wear masks, gloves, or have their temperature taken before they come.
Falkenstein said many of her doulas are currently booked through January 2021. She works with 15 women who are independent contractors, so they all individually applied for PPP loans and self-employed unemployment assistance. Falkenstein received $21,000 in PPP money, and she said she thinks she’ll need more of it if a shutdown happens in the winter.
“As it stands this moment, if everything stays status quo, I should be OK,” Falkenstein said.
Barbara Dagata, owner of Obar Door & Gate Co., says the Cleveland garage door supplier didn’t see a significant dip in revenue. The company never shut down and has done quite well throughout the pandemic.
“We worked the entire time,” says Dagata.
However, Obar did apply for the PPP loan, which Dagata said that was a tremendous help for the business.
She says the company is ahead of last year and has no plans of slowing down. “We’re above $100,000 over last year,” said Dagata. “We’re a pretty established business.”
Anthony Spencer, vice president of the security guard service in Shaker Heights, said the company is in a much better position now than initially.
When the pandemic hit, Safe Choice had a horrible second quarter, Spencer said. Safe Choice secures many public buildings, recreation centers, and pools for the city of Cleveland, and all closed. “There was a significant dip in revenue and obviously profitability during that time,” said Spencer.
Safe Choice applied for a PPP loan, and the money allowed the company to keep up with payroll.
“I would be crazy not to have done it,” said Spencer.
Despite the initial dip, in the last two to three months, Spencer says Safe Choice’s business has picked up and is predicted to exceed pre-pandemic levels. “I’m in a unique business field,” says Spencer. “We’re kind of inelastic, and people still need security even though they shut down everything else.”
Joe Savoy, the owner of Savoy Insurance Group in Elyria, says his company has done fine. He’s been staying positive, knowing markets in his industry have good and bad times.
“I’m at a better place than I was two years ago, for sure,” Savoy said.
At first, he didn’t even plan on signing up for the initial PPP money. But when he spoke with U.S. Bank, who he has a good relationship with, one of the workers told him he’d likely be a “perfect candidate.”
“She pretty much was like, ‘You’d be a fool not to take advantage of it,’” Savoy said.
With the PPP money, Savoy said he was able to bring on one person full-time temporarily and a part-time marketing employee. He called the loan “pretty advantageous” for the company, as he used almost all of it for payroll.
Savoy hasn’t had to lay anyone off, and he usually has three full-time employees on staff, including himself. The number of people who work part-time varies. He probably will try paying back the loan whether or not he’s required to, as he said they have operated “pretty seamlessly without it.” He doesn’t plan on signing up for another round of PPP money if it’s offered.
“I struggled through 2008. I don’t know financially the industry that I work in if that could have been anymore brutal,” Savoy said. “The crash in 2008. We survived that. We’ll survive this.”
After finally moving into the company’s first business space in November, COVID hit Seeley Test Pros at a crucial time, said Amy Seeley, owner of the test preparation and tutoring service in Lakewood.
Seeley says she was no stranger to virtual learning and was able to continue her preparation and tutoring services remotely. However, her biggest issue was demand. Although the company was offering test preparation services, most standardized testing operations had been stalled due to COVID.
Many colleges chose not to require standardized testing..
“We had students finding out they can’t take tests, in which case, why would you prepare for something if you don’t know it’s going to be offered?” says Seeley.
Seeley said she also did a lot of work with area schools, which went remote during the pandemic.
“Schools are very much supportive and help us to connect with students, so the fact that many schools are working remotely or no schools are letting outsiders in the building means the amount of revenue we can generate is severely limited,” said Seeley.
PPP loans helped, but they have run out.
Business typically builds in the fall. This year, however, will be different, ” Going into these lighter months, I’m not building the revenue that will then help carry us through,” Seeley said.
She is unsure of the future outlook but hopes for the best.
“There’s just this element of we don’t know how our consumers are going to view the necessity of test preparation right now,” said Seeley. “We think there’s still value and that they know it’s still value.”
Spring was tough for Bill Athar, manager of the family-owned jeweler based in Mentor, which shut down in March in early April.
After re-opening, the business picked up, and they’re managing, with the help of a PPP loan. “At this moment we are doing OK; the loan really helped us,” Athar says.
Athar says the future outlook for Select is very hopeful, but they are staying cautious.
Vulnerable clients of the Cleveland-based home healthcare service for adults and children with developmental disabilities have been refusing care since March because of concerns of the spread of the coronavirus.
And since many clients have family working or staying at home during the pandemic, they may not need Serenity Healthcare, said the owner, who did not want to use her name.
She worried that with the federal boost to to unemployment payments (originally $600 and now $300) paid home health aides and nursing assistants made more money staying home than they made working.
She said she can’t afford to pay employees wages comparable to factory jobs or positions at companies like Amazon.
“People are starting at Amazon at $15 an hour,” she said. “We can’t pay a home health aide $15 an hour.”