Struggling New York shops are crowdsourcing solutions

The COVID-19 pandemic has affected small businesses in a big way. The government-funded Paycheck Protection Program (PPP) which was enacted to provide small businesses with low interest or forgivable loans has proved to be a frustrating and unsuccessful process for many of the small business owners who need it most.

States like New York that are bearing the brunt of the virus’ economic and health effects are actually receiving a smaller portion of these loans, according to an analysis by the Federal Reserve. Local leaders in these areas have been laser focused on how they can help the most vulnerable businesses weather this storm.

On May 6, the New York State Conference of Mayors hosted a Zoom meeting, “Helping Local Businesses During the COVID Pandemic: Advice from the Front Lines.” The virtual event gathered a variety of business improvement districts (BID) from around the state. 

There was both a shared sense of strategies, as well as similar pain points amongst the panel. 

Outreach & ongoing communications. Connecting with local businesses, restaurant and property owners remains the number one focus during this time. This has been the first step in the process to gain direct insight from those most affected and then take action from there. While Ithaca, Albany, Canandaigua and Troy, New York have all made strides on this front, there was repeated mention of how difficult it has been to actually reach the right people during this time, as most businesses aren’t operating and tracking down management remotely has been difficult.

In terms of communication, most of the business check-ins have been done via email but again, not everyone is checking or responding to emails during this time. The districts are trying to collect more personal data, such as cell phone numbers and alternate emails to improve the response rate.

Downtown Ithaca has 450 businesses and district officials have tasked 4-5 employees with making calls to try to contact each one of those businesses. Other tools like social media outreach and text messages have been utilized as well. 

The city of Troy developed a county-wide pandemic response committee comprised of city and county representatives, state government officials and the local Chamber of Commerce. The committee launched a county-wide survey just last week, which included questions like how many years the business has been operating and how they have paid for things during this time (personal savings, loans, etc.). Troy is focused on the micro-businesses, as 70% of their survey respondents have only 0-4 employees, which means they have less capital and resources.The initial response to their survey also revealed that 30% of respondents can only survive 1-2 months in the current conditions. 

Ithaca deploys a community-wide survey every two weeks. In smaller cities like Canandagiua, (with a population of around 10,000) their BID manager Denise Chapel said that their experience with surveys was helpful, but not as helpful as they had hoped. They have switched their communications from weekly to daily and are seeing an open rate of about 40% right now on emails. Chapel said it’s a small enough area, though, where she has direct relationships with most of the business owners which has proved to be beneficial.

The gift of giving. All of the panelists discussed the ability that local businesses had to generate gift card revenue and online sales to keep them afloat. All of the BIDs are encouraging this type of business and in some cases, are helping bridge that gap if the functionality did not exist. These gift card promotions do require that the consumers wait until the businesses reopen to be able to utilize them, but it helps generate sales for the businesses during this down time.

The Downtown Ithaca Alliance ran a gift card promotion where they created $5 gift cards and shipped them out to businesses in lots of 10. The gift cards are usable anywhere downtown and are a stimulant to help promote online sales. The alliance is creating and administering the cards, so the promotion is an investment on their end.

The city of Albany is offering business-specific opportunities for those that didn’t have the functionality to distribute gift cards online. Georgette Stevens, executive director of the Downtown Albany BID, said that less than 10% of their businesses had the ability to actually do online gift card sales, which is a surprisingly low number.

Albany launched a “Support Now, Savor Later” initiative on May 5 via a Square platform they created. The consumer has the opportunity to buy a $25, $50 or $100 gift card from any of the 30 businesses that are currently participating. The BID is paying for all of the credit card processing fees and a weekly check is being sent to the business owners, who then mail the gift card to the purchaser. 

Canandaigua is getting ready to roll out a gift certificate program, but didn’t mention specifics. 

Other financial relief. Since not all small businesses have been able to cash in on the PPP loans, local relief efforts have been developed. Ithaca launched a “Small Business Resiliency Fund,” a forgivable loan of up to $5,000 per business to help them survive this pause. The fund is currently at $425,000 and was made possible by donations from Cornell University, the Ithaca Urban Renewal Agency and the Tompkins County Democratic Committee. The fund was only up for two days and has already temporarily been taken down, as they received 169 initial applications. There are no real restrictions for businesses that receives resiliency funds, and they can use it for pretty much anything they want to during this pause time.

The city of Albany is offering grant programs to help restaurants with any modifications they may need to make to the interior of their restaurants to abide by new restrictions once reopening phases commence.

But what does that reopening look like? The Governor of New York has proposed that the state’s reopening will be executed in phases on a regional-level. There are four phases in this process and New York is broken out into 10 regions with a list of counties within those regions. 

Gary Ferguson from the Downtown Ithaca Alliance, stated that the governor’s plans so far are “generic and broad.” They plan to use them as a starting place, while still collecting best practices from other regions around the country and trade groups. Specifically, they want to be able to help the small and micro-businesses deal with the many details.

Downton Albany has partnered with the New York State Restaurant Association to start having conversations about what reopening will look like for this sector. Georgette Stephens, who leads a BID in Albany, mentioned that their downtown restaurants will need to re-open at 70% capacity in order for them to be able to make it financially feasible. The town is trying to get creative with how they can make this happen by using sidewalks, streets and parks. Local business leaders are urging the city to loosen its restrictions on sidewalk cafes.

Community versus competition. It remains a day-by-day, business-by-business, industry-by-industry process that all of these regions are trying to tackle. They have all launched industry-specific conversations and virtual events which have been useful for businesses of the same type (be it retail, restaurants, spas, etc.) to tackle their specific hurdles. There were several stories shared where owners were helping other owners and crowdsourcing advice and resources with a “we’re all in this together” mentality. A seasoned restaurant owner in Canandaigua helped a new restaurant owner create a take-out menu and develop a social media presence, while a spa owner in downtown Troy that had shut down completely and didn’t know what to do, was given advice from other business owners. The community support has been a beacon of hope for these businesses to hold onto during this time.