Pandemic pushes small businesses to change By: Martin Cash Posted: 7:00 PM CDT Thursday, Jun. 11, 2020

Hey there, time traveller!
This article was published 10/06/2020 (1562 days ago), so information in it may no longer be current.

It took a global pandemic to turn Chaeban Ice Cream shop into an e-commerce player. According to a new report from RBC, it’s an example of the kind of transition that’s needed from small businesses to save the economy from ruin.

In the sometimes grim report called Small Business, Big Pivot, RBC coins a phrase that cribs from the “too large to fail” tagline of the Great Recession.

This time, it’s the survival of the mom-and-pop shops, startups and small resource service companies that are “too small to fail”.

The study notes what many have suspected — small firms are in the greatest danger in this recession. They have already recorded almost double the rate of job losses compared to mid-sized and large firms and vulnerable sectors like hospitality, arts and entertainment, non-essential retail, mining and oil and gas services and commercial real estate leasing.

The summer months are the time that every ice cream shop makes its money for the whole year. When the pandemic struck, funds were already low at the south Osborne ice cream shop.

Brainstorming sessions with partners, Joseph Chaeban, Joseph’s wife Zainab Ali, and Darryl Stewart resulted in the idea for an on-line ice cream subscription service. Twenty dollars for two pints delivered free every month.

“Definitely once the pandemic started our cash flow was gone – we were relying on the summer to survive,” Chaeban said. “But when the pandemic happened we were in big trouble. That is why we had to strategize and come up with this amazing life saver.”

They got 400 to sign up for subscriptions in two days, after a soft launch with friends.

Chaeban said without it, the business probably would have gone bankrupt.

“Definitely once the pandemic started our cash flow was gone– we were relying on the summer to survive. But when the pandemic happened we were in big trouble. That is why we had to strategize and come up with this amazing life saver.”
– Joseph Chaeban

RBC reports that firms with fewer than 100 employees accounted for nearly 60 per cent of job losses in the first two months of the pandemic, twice the share of job losses they experienced during the 2008-2009 recession

While businesses that “relied largely on the kind of physical contact with customers that collapsed overnight” are in danger the world over, in Canada they are also more likely than other places to be digital novices. This can include everything from restaurants to rig operators, fitness gyms to food suppliers.

RBC reports that most Canadian companies with fewer than 500 employees don’t even have a business website. And of those that did, less than 10 per cent had the capacity to conduct e-commerce.

It was a worrying trap that was stunting small-business growth before the COVID pandemic and it did not escape the notice of economic development types.

For instance, World Trade Centre Winnipeg’s trade accelerator program was designed to get small businesses thinking more about selling outside their local markets and that “trade” was not something exclusive to large corporations.

Loren Remillard, the president and CEO of the Winnipeg Chamber of Commerce – which is a partner in the World Trade Centre – said one of the messages was that, with just a website, companies can do so much more than just serving their local market.

“This is where people find products and services today around the world and lots of small businesses are doing business all around the world just because they are e-commerce enabled,” he said.

Remillard said plenty of businesses are now anxious about their digital prospects because, given the unexpected tumult caused by the pandemic, they don’t have the luxury of slowly launching e-commerce shops. For many, the digital world can be a scary, uncertain prospect.

“In the midst of COVID, many companies are thinking about what expenses are optional that could be cut while they try to salvage operations and retain staff. That tends to be the focus and those things can work against small businesses these days.”
– Loren Remillard, president and CEO of the Winnipeg Chamber of Commerce

“In the midst of COVID, many companies are thinking about what expenses are optional that could be cut while they try to salvage operations and retain staff,” Remillard said. “That tends to be the focus and those things can work against small businesses these days.”

Chaeban said they took a month to figure out the right people to hire – starting with a Red River College IT student – and have purposefully delayed opening the store for walk-up traffic, at least partially, to ensure they had designed the digital subscription business properly.

“I was hoping — not expecting – to get 80 customers,” he said. “We figured we could then build on to it with advertising and marketing.”

But it caught on right away and they are trying to maintain it properly with the right kind of customer service even before they re-open the store.

Remillard said, “You can’t just slap up a website and hope you get Googled. You need a concerted plan on how you implement and market the program.”

martin.cash@freepress.mb.ca

Martin Cash
Reporter

Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.

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