Small shops face big fight

SANDUSKY — Amid the pandemic, the 10 wealthiest people in the world increased their fortunes by $400 billion while local entrepreneurs struggled to keep their businesses afloat. It's true everywhere, including here. Several local small businesses recently announced the end of their companies due to COVID-19 at one or all of their locations, including D&A Service Center's Sandusky location and Derrick's Diner. "Small businesses, especially retailers and restaurants, have been hit hard by the economic repercussions of the pandemic," said Sarah Ross, the program director for the Erie County Economic Development Corp. "Due to an accelerated shift toward on-demand and at-home retail and an already challenging business model in a small community like ours, even the most prepared small businesses are having a hard time remaining profitable." Ross works with several local entrepreneurs through the corporation's Regional Incubator for Sustainability and Entrepreneurship (RISE). According to Ross, there's a misconception that small business owners are wealthy like the executives of Fortune 500 companies. "Most small business owners go into business and succeed due to their passion for what they do," Ross said. "They often pay employees before they pay themselves, invest in new equipment or inventory for the business." With competition from national companies and online retailers, locally owned businesses operate on razor-thin margins of profit. "Small business owners in markets of our size have to capture an unusually high percentage of the market share to make their business proposition feasible," Ross said. "To capture the kind of market share needed to make these businesses profitable, the business not only has to run flawlessly, but conditions have to be right as well, and 2020 has provided the worst conditions possible. This is why tourism helps our small businesses so greatly; the additional people make the math problem easier." The pandemic increased the difficulties that brick-and-mortar businesses have faced for years. The leisure and hospitality industry has had more than 40% of year-over-year job losses. "The potential bankruptcy of so many retailers may benefit others because of lowered competition, but this will not make up for permanent shifts in demand brought on by the pandemic," Ross said. Most small businesses won't be viable again until the economy recovers from the setbacks caused by the COVID-19 pandemic. Ross recommends small businesses to have a rainy day fund for one month to six months of expenses. "Those businesses that continue to remain open and those that have closed temporarily or permanently have all made tough decisions and weathered unimaginable storms," Ross said. "The most effective way to save the businesses that remain and create an environment conducive to opening new or reopening businesses is to slow the spread of the pandemic. We must play an active role in returning our community to a safe and healthy place to do business."