Jill Justin had to think fast when the coronavirus pandemic hit.
As the owner of Jill Justin Dance Alliance in Middlesex County, New Jersey, she went from having close to 500 students taking classes seven days a week to shutting her studio doors.
After taking some time to regroup and change her business model, Justin started offering Zoom classes and asked those who could afford it to continue paying tuition. Her revenue dropped by 50%.
Now that her business is back open with restrictions like masks and six-feet of social distancing, and at 50% capacity, Justin is wondering about her next move.
“Should I return to my corporate career or take on a part-time position?” she said. “Should I reinvent my business even more for these changing times?
“Should I look for different business opportunities?”
That’s what was on Justin’s mind when she took part in the Ewing Marion Kauffman Foundation and CNBC + Acorns Invest in You’s
hosted by CNBC’s Kate Rogers, on Wednesday.
She was one of several business owners who got advice from a variety of financial and entrepreneurial experts, including Melissa Bradley, founder of 1863 Ventures; certified financial planner Lazetta Braxton, co-founder and co-CEO of 2050 Wealth Partners; Bobbi Brown, founder and CEO of Beauty Evolution + Evolution 18; Brad Feld, co-founder of the Foundry Group; and Phillip Gaskin, vice president of entrepreneurship at the Kauffman Foundation.
Staying in business
Keeping the doors open is the biggest challenge facing small businesses today.
Approximately 60% of businesses that closed during the crisis won’t be reopening, according to Yelp’s Economic Impact Report, released in mid-September.
Businesses like Justin’s that are struggling to find their footing should think about what their community’s needs are now, said beauty icon Bobbi Brown, who left her namesake cosmetic company in 2016 to start her new lifestyle and content company.
“This is an opportunity for people that have small businesses to pause, look at everything and say, Where am I now? What was working? What wasn’t working?” she told Justin.
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For example, Brown’s new line, Evolution 18, is sold in retail stores. When the pandemic hit, she had to pivot to direct-to-consumer sales.
She suggests Justin offer something that her clients can do while they are home and be ready to take the next step when things change.
Reaching out to a support organization in your community is also important right now, said Phillip Gaskin, vice president of entrepreneurship at the Kauffman Foundation.
For instance, the Kaufman foundation has its 1 Million Cups program, which provides free weekly meetings for entrepreneurs around the country.
The racial divide
Entrepreneurs of color have been hit even harder during the pandemic.
Video: Coronavirus pandemic pushes small businesses to create succession plans (CNBC)
The number of Black business owners dropped by 41% from February to April, according to a June report from the National Bureau of Economic Research. The ranks of Latino business owners fell by 32% and Asian business owners by 26%, while the number of White owners fell 17%, the report found.
“Black and Latinx and other people of color have been disproportionately impacted by the pandemic because of common social and economic factors that were already in place, that only increased our risk for Covid-19,” said Stephanie Bermudez, founder and CEO of Startup Unidos, which focuses on cultivating entrepreneurship on border communities in Arizona.
“These challenges can no longer be shrugged off or go uncharted.”
Melissa Bradley, whose company 1863 Ventures focuses specifically on helping entrepreneurs of color, said the first thing business owners of all ethnicities should do is an honest reflection on their practices and to make sure people feel safe.
Right now, people are feeling stress, so that means creating some space and perhaps offering more days off. Also, think about what free resources, like mental health support, that you can offer your employees and how to deploy them, Bradley added.
White business owners should not lean on people of color to answer all their questions about systemic inequality, she said.
“Be sure to engage and really do a deep introspection of what your role is in the structural barriers and systemic racism that we have,” Bradley said.
It’s also important for entrepreneurs of color to feel empowered, said CFP Lazetta Braxton.
“Know that you are not alone,” she said. “We have a history of getting through tough times.”
Prospecting for new business
For Ginger Jones, who owns an online reputation management software company called WebPunch, in-person meetings, conferences and referrals are the main way her company gains new business.
Now that conferences and travel have been shut down, she’s concerned about how to create genuine relationships.
“We are doing some fun things, like cooking classes that combine clients/prospects, webinar series, etc.,” Jones said. “But getting through the ‘digital’ noise to prospects is tough, as everyone is doing these types of things.”
Bobbi Brown suggested Jones use the time she now has due to that lack of travel and conferences to think about what she can be doing and how to connect with people.
“Use your phone, use your Instagram,” advised Brown, who said she’s been talking to people who have reached out to her through social media.
“Figure out who you would like to possibly have a conversation with,” she added. “People are a little bit more ready right now to have these conversations.
“There are many of us entrepreneurs that have been helping other small businesses.”
Business was booming for entrepreneur Eze Redwood after his consulting business was acquired by Kansas City, Missouri-based marketing Lillian James Creative in December.
Everything ground to a halt when the pandemic hit. The team has since been working days, nights and weekends to build the company back up.
“The crisis that came with the pandemic was the first time that many main streets and minority entrepreneurs felt like their local governments actually cared about them,” said Redwood, now vice president of community and experience at the firm.
His concern is how to ensure that support continues after the virus has passed, especially since local governments will be facing critical budget deficits.
“Think about how to demonstrate your impact and your value because everything is going to be opportunity costs,” said 1863 Ventures’ Melissa Bradley.
She suggests entrepreneurs go to their legislators, not only during times of crisis, and leave behind one page of information about the business. Also, find a task force in your area that focuses on small-business issues and invite yourself to join in. Lastly, look at what other cities have done for entrepreneurs and present it to your legislators, since peer groups can be a great influence, Bradley said.
Remember, small businesses generate more than 40% of economic activity in the U.S.
Gaskin agrees and encourages entrepreneurs to believe in themselves.
“You already started the business,” he said. “Look at the odds that you beat in starting that business.
“Understand that you have it in you and many people are pulling for you.”
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.