One week into shelter-in-place, San Francisco businesses are making big changes to stay afloat

  • Businesses throughout the Bay Area — from party supply companies to coffee houses — are upending their traditional business models to combat a coronavirus-induced plunge in sales.
  • Many public officials are looking to San Francisco for signs of what shelter-in-place orders could portend for local economies across the country.
  • While some industries in San Francisco have managed to pivot, travel and tourism have been battered.

Mike Seramin owns a party supply company in Daly City, just outside of San Francisco. Abbey Party Rents, founded in 1947, is used to booking around 20 events per day of all sizes, but he netted just two new clients all of last week — small outdoor picnics set for August.

Seramin, like others in the hospitality industry, is hoping for a tidal wave of pent-up demand once the coronavirus outbreak subsides. But, for now, his company has turned to assembling ancillary tents for hospitals to keep money coming through the door.

“Everyone is putting their lives on hold,” he said.

Seramin is one of the hundreds of Bay Area business owners upending their traditional business models to combat a coronavirus-induced plunge in sales. It’s been one week since San Francisco Mayor London Breed and fellow Northern California officials unveiled what was, at the time, the most stringent set of restrictions to curb the coronavirus — a “shelter-in-place” order affecting 7 million residents in six Bay Area counties. The directive shuttered non-essential businesses and mandated residents leave home only for essential needs, such as grocery shopping and picking up prescriptions. 

Since then, governors across the country have announced similar measures. Stay-at-home orders now blanket 16 states, from Hawaii to Connecticut. Many are looking to San Francisco for signs of what these shutdowns could portend for local economies across the country.

Abbey Party Rents is operating on a skeleton crew, with just six people working full-time. Typically, Seramin employs 60 to 70 people during this time of year. He’s asked the salary management team to take pay cuts, laid off employees, and moved some to rotating shifts to cushion the blow.

“It’s kind of eerie,” Seramin said of his company’s operations hub. “There are a bunch of empty desks, nobody floating around the warehouse and we have 12 trucks parked in the parking lot.”

To keep money coming through the door amid the uncertainty, Seramin and other businesses in the events industry have deployed their expertise to supply support services to hospitals and health care services in the Bay Area. That includes tenting, generators, tables, and chairs for temporary in-patient testing centers, as local and state public health officials prepare for a surge in coronavirus patients. California Gov. Gavin Newsom said on Monday the state would need an additional 50,000 hospital beds to respond to the coronavirus outbreak.

“Getting cash in the door to sustain our operations is paramount to our survival,” Seramin said.

As of Tuesday, the number of confirmed coronavirus cases in the U.S. had topped 46,000, and deaths exceeded 500. California had the third-highest number of cases by state, behind New York and New Jersey. The Bay Area alone registered more than 1,000 cases.

Mayor Breed announced all city playgrounds would close to further encourage social distancing. Governor Newsom followed by shuttering parking lots at all California state parks. Newsom added that, over the past week, the number of people filing for unemployment claims across the state averaged 106,000 per day. The daily average before the outbreak was just 2,500.

Restaurants and retailers have been especially hard hit already in San Francisco. In February, many started to see a moderate slowdown in foot traffic. Most found it manageable, but now under shelter-in-place, revenue has dropped precipitously. 

Dozens have laid off more than half of their staff, and several have already had to close their businesses completely, according to the city’s Chamber of Commerce. This is especially true for those restaurants that relied on a sit-down service business model, and can’t pivot easily to delivery or take-out.

But some have found shimmers of success.

Lauren Crabbe, co-owner of Andytown Coffee Roasters in San Francisco, has had to change how her business operates completely. When the shelter-in-place took effect last week, Crabbe shut down two of four stores in San Francisco and cut all hours for 45 employees. Twenty store managers have stayed on to work between twelve and fifteen hours aday at the two locations still open.

“I had to make the call of balancing the needs of my employees to have jobs with the responsibility we have for their health,” Crabbe said. “We realized that, if we completely shut our doors, we would not have been able to make payroll, pay out all of the employees’ paid time off and allow them to keep their health insurance for the coming month.”

Crabbe is trying to make up lost revenue by offering discounted gift cards online and delivering coffee to health care workers. On the company’s website, customers can buy coffee and food specifically for these first responders, and Andytown workers then deliver the items daily to hospitals across San Francisco. That’s let Crabbe re-hire some of her hourly employees — five as of this past weekend, and she’s hoping to bring back more this week.

Still, Crabbe and others admit the path to re-opening remains unclear.

Andrew Chau, co-owner of San Francisco-based Boba Guys, laid off 400 employees and temporarily closed down all 17 locations across California and New York. Chau and his business partner are trying to forecast how many weeks the business can survive.

“It’s as bad as 9/11 or worse,” Chau said. “The 2008 crash has nothing on this one.”

Over the past week, Chau has spent his days filling out small business loan applications and negotiating with landlords and vendors over payments. He and a few co-workers have also donated straws and milk to local food banks to assist city residents in need.

Like many small businesses, Chau is emphasizing e-commerce now more than ever. He has brought in more money through gift cars than all past holiday seasons combined. He’s also weighing whether the shutdown, if prolonged, could force the business to go all-delivery for a year.

“Shelter-in-place has effectively cut the entire market in half,” Chau said.

Source: https://www.cnbc.com/2020/03/25/one-week-into-shelter-in-place-sf-businesses-pivot-to-stay-afloat.html

You may like

In the news
Load More