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Small Businesses in Vancouver Benefit from Government Grants During COVID-19

Currently, the COVID-19 pandemic has profoundly affected the residents of Vancouver both socially and financially. The extension of restrictions to Feb 5 has impacted the way in which businesses run their outlets. Local shoppers continue to shift to online shopping as opposed to going to a physical store outlet. The impact of this shift is disproportionately impacting small businesses, who do not have strong e-commerce websites and a national-scale supply and delivery network to offset losses from retail outlets remaining closed. This month, our writer, Neelia Fuad, interviewed owners of Vancouver-based small businesses Sunja Link and Devil May Wear in order to get a more in-depth understanding of how the pandemic has affected the way in which they run their small local businesses in Vancouver. This article was edited by Kajal Pawar.

Photo Credit: Devil May Wear

The Pandemic Threatens Small Businesses

During the new year, government and health officials have been focused in providing the people with vaccines against COVID-19. Whilst the medical industry is seeing great successes, other industries are finding different options to keep themselves afloat. In particular, the business sector within Vancouver has seen a wide variety of changes in the way they operate. According to Statistics Canada, the number of business closures edged down with the easing of COVID-19 restrictions. Last year, fewer business closures were seen in August, in comparison to February and July. Statistically, 34,126 business closures occurred in Aug. which was 2.7% less than in July and 14.2% lower than Feb. Based on this, it appears that businesses have been adapting to the post-COVID economy and have learned to generate revenue amidst lockdown restrictions. Retail businesses such as Sunja Link Body Shoppe on Main St. and Devil May Wear on Granville Island have found a way to grow during this difficult time.

Opportunity to Move Sales Online

Sunja Link Body Shoppe started out as a clothing line in 2002 and pivoted towards beauty and wellness in 2008. The goal of the business was to fill the need of a transparent beauty retail shop and spa in Vancouver. The transparency that the company has means that all of their products are produced in local factories with all ingredients listed, no big labels, said Link.  According to her, running businesses became more challenging over the past decade, as they realized that this there is a reduction in their control especially overseeing how the pandemic has affected the overall progress of their businesses.  

Photo Credit: Sunja Link Body Shoppe

When asked how the company made it through the pandemic, Link explained that “it was scary and hard in the beginning, but we were set up for (our) online (business) which allowed us to focus on that”. As a small business, it became essential to adapt in order to make it through. Additionally, she elaborated on how “small businesses are a pillar of every community,” emphasizing the need to support small local business outlets.

Support was also garnered through the federal government. With a physical outlet, the business was able to receive an interest-free loan which is also known as the Canada Emergency Business Account (CEBA). The CEBA is a $55 billion program that the government provides for current enterprises in order to help them relaunch when the economy reopens. They provide financial support of up to $60,000 for expenses that small companies or non-profit organizations cannot avoid or defer. Through the loan provided, Link was able to stock up on products to sell during the pandemic. Currently, the company is putting a much bigger focus on their website. Link spends most of her time prioritizing the customer service aspect of her website whereby she answers questions that the customers have regarding the products that are offered. Compared to the pre-pandemic days, she sees the online platform as more time-consuming than running the store. This is because they are constantly online and on the phone with their customers with the current shift towards online shopping.

Riding Out The Storm Offline

On the other hand, Devil May Wear took a different approach as they still have hopes of opening up their local shop for clients in Vancouver. Being in the fashion industry for over 17 years, business owner Stephanie Ostler holds strong pride in her boutique which focuses on 3 important aspects: focusing on local production (even though it challenges her due to the temptation of having cheaper prices for production), being an ethical brand through making the right decisions at all times and making sure that their garments are sustainably aspiring.

Today, Ostler feels as if everything has been greenwashed. For her, not a single company so far has fully closed the loop in being sustainable. “[We] now call ourselves sustainably aspiring. I think it is a more honest way to have a conversation and talk about it,” said Ostler. With her experience in the fashion industry, Ostler compares the current situation to the time of the recession in 2007. During the recession, she did not know what was happening; she did not fully understand what a recession was. To describe the experience, Ostler shared, “It was like being in Niagara Falls and one day Niagara Falls just stopped.”

After thorough research, she found interesting trends that popped up as people had a reduction in their disposable income. They focus on more tailored garments and they began to lean more towards neutral colors like black. She reflected these findings to the current pandemic and found that some aspects were similar. According to her, the tap turned off instantly and the company went from having sales to having no sales.

Though people are not leaning towards black in the year of 2020, one thing that she found interesting was how the color rage of 2020 was taupe and cream which is considered monochromatic. Additionally, people were buying basic pieces in this color to improve their wardrobes. “I think with payouts from the governments, all of us being in this together, (it gave) people the idea that light is not the darkness,” said Ostler.

In terms of support, she was grateful that her staff was able to receive financial support from the government. With the company making losses, Ostler did not make enough profits to support her staff. With the help of the government, she was able to have her staff supported and it gave her staff the flexibility to come back to work slowly.

In terms of the loan support, Devil May Wear qualified for a $30,000 in interest-free loan from the government which Ostler used to carry the cost of the company. She mentioned how the loans that she received from the government do not last long due to the fixed costs of $15,000 of the company.

Another support that she received was from her landlords as the company was able to defer their rent due to the pandemic. Her landlord also reduced the rent for her business through the grants that they secured from the government. In terms of her staff, a portion of their wages were paid through a program called the Canada Emergency Wage Subsidy (CEWS). The CEWS is a program which allows Canadian employers to cover a part of their employee wages. Through this program, employers can re-hire their workers, help prevent further job losses and ease their business back into normal operations.

While the pressure to transition to an online selling platform continues to rise, Ostler still wants to focus on retail over the web as she claims that they are unable to obtain the same degree of success without a physical presence. For a small company providing sustainable clothing ethically in Vancouver and paying minimum wages for labour, she feels that she is unable to compete with the other sustainable clothing companies online. With a physical outlet, the staff is able to provide quality customer service, interact with clients and find the right fit for customers. Marketing an online business requires expenditure on social media and web-based marketing, which is a highly visual medium required quality photography as well, in order to grab the attention of customers. The unique needs of these two platforms means that the transition from retail to online is not easy for all local businesses to make.

The Next Step For Small Retail Outlets

Rationally, Ostler feels that there is the need to have a 50-50 split between the physical outlet and having an online store especially when it comes to owning a business in Vancouver. Whilst it is important for businesses to move to an online platform due to the current circumstances, it will also be interesting to observe whether adapting to the pandemic will impact the way the profits are received by retail businesses. There could be a slow restoration of small physical outlets within Vancouver which would allow for people to physically visit the stores and purchase their items.

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