FOX 11 Investigates: How COVID-19 pandemic has impacted small businesses
FOX VALLEY (WLUK) -- Eight months into the pandemic, and some businesses are still having to make changes because of COVID-19.
"I want to show my kids I’m going to be strong through these times but it’s very, very difficult," Steve Lonsway, who owns the Stone Arch Brewpub in Appleton, said. "When we closed back in March and I had to go to all the employees and say we’re shutting down, we don’t know what’s next... that was just heartbreaking."
Lonsway says he has had to get creative to stay in business.
He started the “Stone Arch Market” to adapt to these market changes.
"People that want our food but don’t feel good about coming out to a restaurant yet, they can come on in and buy it right there, take it home, or they can order it online and we can bring it out to their cars," Lonsway said. "Because we are multi-faceted with our new market, our beer out in the retail market, and at 25% using all our spaces, I really think we can make it until summer, and then our beer garden opens up."
Jeff Sachse, the director of UW Oshkosh’s Center for Customized Research and Services, says accommodations and food services have been hit hardest by the pandemic.
"The business community in Northeast Wisconsin has experienced about $57 million in income loss over the pandemic, and that has also been accompanied by a loss of about 5,700 positions," Sachse said.
"We did a survey right after the 25% order came down, and upwards of potentially 50% of our restaurant members are going to go out of business without further financial help from the federal government. So it’s a pretty dire situation," Wisconsin Restaurant Association President Kristine Hillmer said.
Hillmer says before the pandemic, profit margins for restaurants were already tight.
"Ninety-five to 97 cents of every dollar that comes in is already spoken for in terms of staff costs, your food costs," Hillmer said.
For most restaurants, that profit margin is now gone, according to Hillmer.
"We have been surveying businesses across the state. We have right now a survey list of about 4,200 different companies that we’re surveying monthly," Sachse said.
He says the viability of businesses has shifted over the course of the pandemic.
"Our first survey showed 42% of businesses that responded suggested they wouldn’t remain in business past three months. Again, under the assumption of current circumstances," Sachse said.
Sachse says after the ‘Safer at Home’ order was struck down, businesses started to feel more confident about staying open.
"When we got into the late summer, now into the fall, we’re starting to see those same anxieties creep in," he said.
Lonsway says he got funding through the Paycheck Protection Program, called “PPP," at the beginning of the pandemic.
"It definitely helped. Another round would be awesome, but we don’t know if that’s coming. We’re certainly not banking on that," Lonsway said.
PPP stopped taking applications in August.
"Restaurants absolutely need more funding through PPP. Most of them have burned through all that they received before. Their line of credits are tapped out. I have heard stories where some restaurateurs are mortgaging their homes to keep their businesses alive," Hillmer told FOX 11.
There are other grants and loans available to small business owners, but Sachse says not every business owner has taken advantage.
"There’s just a lack of awareness of what they were eligible for," Sachse said. "When you think about how those programs were originally designed, they were designed around this idea of short term economic injury. The messaging and communications around who was available and who was eligible for assistance was really more of an afterthought than intention."
Despite any confusion over eligibility, the business community says they need more help.
Senator Tammy Baldwin, D-Wisconsin, introduced a new COVID-19 relief bill for small businesses.
Her office did not grant us an interview after multiple requests, but here are some key takeaways from the bill:
- Extend the Paycheck Protection Program through March 2021
- Include a $40 billion ‘Lifeline Grant Program’ for small businesses
- Give assistance to struggling industries like restaurants, concert venues and theatres
- Give emergency grants to minority owned businesses
Statewide, Governor Tony Evers has called for action to stop the spread of COVID-19 for economic recovery.
"Our bars, restaurants, small businesses, families and farmers will continue to suffer if we don’t take action right now. Our economy cannot bounce back until we contain this virus," Evers said in a press conference earlier this month.
"We won’t know the full impacts of this until probably this spring," Sachse said. "I think one of the biggest impacts we’re going to have to face as a region and as a state is, does living through this pandemic make us more risk averse and conservative in our business strategy? Are we unwilling to take risks because we know our business may vanish overnight?"
Sachse says his data tells a story of resilience.
"While businesses may continue to experience losses, those losses will be mitigated by their ability to pivot into other areas, which will only help them when we recover," he said.
Lonsway says he’s staying hopeful.
"We’ve had an amazing outpouring of support from locals," Lonsway said. "We made some people happy in the 16 years. It's being paid back to us and that's awesome."
"There is a community that is willing to help and to open their arms and say ‘just tell us how,'" Sachse said.
Resources for businesses:
- Small Business Administration
- Wisconsin Economic Development Corporation
- Hmong Wisconsin Chamber of Commerce Emergency Loan
- Wisconsin Women’s Business Initiative Corporation Loan
