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For Ashlie Ordonez, owner of the Bare Bar Studio, a spa in Denver, vaccinations for the coronavirus can’t come soon enough. While she anticipates better days later this year, surviving until then will be a struggle, and she knows the next few months will be lean ones.
“I sold my wedding ring so we could pay the bills and keep the doors open,” she said. “I’m sacrificing everything to make it through this pandemic.”
Vinay Patel, who manages a chain of nine hotels in Maryland and Virginia, is looking even further out for a recovery: “2022 is when we’ll see the real true potential of the vaccine.” Mr. Patel added that his biggest hope for the coming year is a measure of stability, if not prosperity.
As 2021 begins, business owners big and small confront a rapidly shifting landscape. An end to the pandemic is in sight as inoculations begin, but the slow pace of vaccinations has delayed the turnaround they were counting on. Hanging on is the chief goal for many, even as others look ahead to what they consider to be an inevitable rebound.
This year “is not going to be a walk through the park, but I’m optimistic,” said Jimmy Etheredge, chief executive for North America at Accenture, the strategy and consulting company. “The eggs are in the vaccine basket.”
Even as he anticipates a turnaround, Mr. Etheredge emphasized that many of the changes wrought by the pandemic, such as working remotely and a shift to cloud technology by companies, are here to stay.
“Ten months of pandemic has accelerated technological change by 10 years,” he said. “We’re never going to go back to the way things were before.”
In the meantime, it’s clear that there will be winners and losers this year. Restaurateurs, leisure and hospitality businesses and the travel industry will continue to struggle as a surge in Covid-19 cases prompts renewed lockdowns in many parts of the country. Few expect imminent salvation.
The biggest companies, on the other hand, are positioning themselves for what could be a surge in consumption when the pandemic recedes. Technology, manufacturing, health care and some other industries are booming.
Indeed, the contrast was evident last week as major stock indexes notched new highs even as the Labor Department reported that the economy lost 140,000 jobs in December. It was the first decline in months, with the leisure and hospitality sector alone losing half a million positions as lockdowns are enacted.
“There is light at the end of the tunnel,” said Brian Moynihan, chief executive of Bank of America. “But there’s a side of the economy that’s still in trouble. There’s a group of Americans who want to go to work but can’t because work isn’t open.”
Mr. Moynihan said he was pleased that the $900 billion pandemic relief package was passed and signed into law after many fits and starts, and he favors more stimulus if necessary. Roughly 19 million workers are collecting unemployment benefits, and the employment picture remains bleak for many lower-wage workers in the service economy.
President-elect Joseph R. Biden Jr. signaled Friday that trillions of dollars’ worth of fresh stimulus could be on the way, and the imminent Democratic control of the Senate makes that much more likely.
As trying as the next few months seem, the economy is in better shape than in the months after Covid-19 first struck, when unemployment soared to 14.8 percent. The jobless rate in December stood at 6.7 percent.
Holiday spending by Bank of America customers was 2.5 percent higher than last year, and account holders actually have more in savings than they did before the pandemic. “There’s a bunch of sectors that are doing very well in terms of profits,” Mr. Moynihan added.
Even so, these remain times of limbo for many executives and business owners, when the old rules no longer apply but the post-pandemic reality has yet to materialize.
“The days of having a permanent budget or a permanent plan are gone for a while,” said Mercedes Abramo, chief executive for North America at the luxury-goods purveyor Cartier. “You’ve got to manage through this ambiguity.”
Adaptation is a strategy that Ivan Kane, owner of a cafe and nightclub in Columbus, Ohio, knows by heart.
To comply with social-distancing requirements, he reduced the venue’s capacity from 320 to 117, filling what was formerly a dance floor with tables to provide adequate space between guests. To attract customers, he bought 15 hospital-grade ultraviolet disinfecting lamps, and he recently acquired an igloo to allow guests to dine outside while protected from the elements.
In the coming months, Mr. Kane hopes he will be able to break even, but he predicts that it will be a year before he is able to usher in the crowds necessary to make his business profitable.
“The margins are razor-thin,” he said. “It’s just about keeping the lights on.”
But for other business owners, the vaccine has arrived too late. In September, Camilla Marcus closed West-bourne, her restaurant in the SoHo neighborhood of New York, after she was unable to renegotiate her lease to reduce rent costs.
Ms. Marcus has kept a trickle of money coming in by selling packaged foods on her company’s website as well as holding virtual events. But she has no plans to open another restaurant.
“It’s going to get a lot worse before it gets better,” she said. “It’s going to be a long haul.”
Others, like Roy Paulson, a factory owner in Temecula, Calif., are feeling more secure. Like many manufacturers, he has had strong demand during the pandemic for the industrial face shields and goggles his company makes for the likes of welders and electricians.
The economic relief package will issue payments of $600 and distribute a federal unemployment benefit of $300 for at least 10 weeks. Find more about the measure and what’s in it for you. For details on how to get assistance, check out our Hub for Help.
- Will I receive another stimulus payment? Individual adults with adjusted gross income on their 2019 tax returns of up to $75,000 a year will receive a $600 payment, and a couple (or someone whose spouse died in 2020) earning up to $150,000 a year will get twice that amount. There is also a $600 payment for each child for families who meet those income requirements. People who file taxes using the head of household status and make up to $112,500 also get $600, plus the additional amount for children. People with incomes just above these levels will receive a partial payment that declines by $5 for every $100 in income.
- When might my payment arrive? The Treasury Department said on Dec. 29 that it had started making direct deposit payments, and would begin to mail checks the next day. But it will be a while before all eligible people receive their money.
- Does the agreement affect unemployment insurance? Lawmakers agreed to extend the amount of time that people can collect unemployment benefits and restart an extra federal benefit that is provided on top of the usual state benefit. But instead of $600 a week, it would be $300. That will last through March 14.
- I am behind on my rent or expect to be soon. Will I receive any relief? The agreement will provide $25 billion to be distributed through state and local governments to help renters who have fallen behind. To receive assistance, households will have to meet several conditions: Household income (for 2020) cannot exceed more than 80 percent of the area median income; at least one household member must be at risk of homelessness or housing instability; and individuals must qualify for unemployment benefits or have experienced financial hardship — directly or indirectly — because of the pandemic. The agreement said assistance will be prioritized for families with lower incomes and that have been unemployed for three months or more.
New models of shields, originally set to be released last year, will be coming out soon, which Mr. Paulson hopes will further boost sales. Last week, the Institute for Supply Management reported that its manufacturing index jumped in December to its highest reading since August 2018.
“Manufacturing is alive and well in Southern California and the U.S.,” Mr. Paulson said. “I’m expecting an excellent year.”
While the situation is very different for restaurants, some are confident that the industry will rebound.
“We think things will turn the corner in the not-too-distant future,” said Brian Niccol, chief executive of Chipotle Mexican Grill. He is eyeing summer or early fall for a return to normal, adding that “people will want to eat and socialize and restaurants will be well positioned.”
Mr. Niccol has some major advantages over small entrepreneurs — his company is debt-free with a strong cash position and a stock market capitalization of nearly $40 billion. But some small business owners share his optimism.
Andy Rodriguez, co-founder and chief executive of the Salty Donut, an artisan doughnut shop and coffee bar with locations in Texas and Florida, believes that the pandemic will strengthen his business in the long run.
After the virus struck, Mr. Rodriguez had to rapidly transform his company’s business model, which used to rely heavily on in-store traffic and corporate catering. He made the doughnut shop’s full menu available on Uber Eats, and beefed up its social media presence to encourage customers to place online orders.
Mr. Rodriguez hopes that the work the business has done to build its digital sales platform will allow the business not just to recover, but flourish, as the pandemic subsides.
“We’re going to be in a far better position than ever before,” he said. “We’re going to be firing on all cylinders.”
Audrey Hoyt, who owns the Seattle-based co-working business the Pioneer Collective with her husband, is also confident that in the coming year there will be more demand for their company’s services than ever before. She believes that co-working arrangements will be attractive to many businesses looking for flexible office space during the transition to a post-pandemic world.
Ms. Hoyt said she hoped that Democratic control of the Senate would clear the way for more stimulus efforts.
“The implementation of more loans and assistance to get small businesses through this period is essential,” she said. “Now that the Democrats have more power, I’m more hopeful we’ll be able to get the help we need.”
Ms. Hoyt has been working to expand the company’s real estate holdings, even as business revenue has been cut in half because of the pandemic. Because commercial landlords are eager to attract tenants, the business has had more leverage in negotiating favorable lease terms, Ms. Hoyt said. She plans to open a new building in downtown Seattle in April.
“It was a deliberate decision: Either we close entirely or we dig deeper and find a way to stick this out,” she said. “Hopefully we will come out stronger on the other side.”
Ben Casselman contributed reporting.