Open For Business? Shops Walk Tightrope Between Finances And Safety

Thursday, May 28th 2020

May 18th was the day Texas hair salons and barbershops were slated to open as part of Governor Abbott’s slow roll to restart the state’s economy. But as other shops were charging trimmers and dusting off chairs, all nine Birds Barbershop locations remained closed.

“We were definitely surprised by the timing of when we could open,” said Jayson Rapaport, co-owner of the barbershop chain. “We've spent the last six weeks sort of trying to understand what it's going to be like to operate a barbershop in this new environment.”

Birds was putting the finishing touches on their new safety protocols, which go further than the state’s mandated social distancing guidelines. There are no waiting rooms now; the shop will text patrons when their chair is open. Masks are required for everyone. And a favorite staple of the salon is temporarily suspended.

“We’re pausing our beer service temporarily,” Rapaport said. “As much as I want to give everyone a beer...we’re going to pause that for a little while.”

Birds is just one of the many businesses trying to navigate the new Covid-19 normal. Most industries in Texas have been allowed to open with new safety rules in place. Travis County and the city of Austin have additional safety guidelines, but businesses aren’t obligated to follow them.

“Orders that were written by the county and the city are intended to provide further guidance,” Laura Huffman said. She’s the CEO of the Greater Austin Chamber of Commerce, and she’s also heading up the Opening Central Texas For Business Task Force, a coalition of more than 120 businesses, nonprofits and community leaders.

“Of course, there's no ability to mandate or to attach fines or fines to these requests,” Huffman said. “So, I see those as more requests to the community on best practices.”

Best practices have been a big focus for the task force. The task force presented their recommendations to Mayor Steve Adler and Travis County Judge Sarah Eckhardt in early May. As their report detailed, opening up businesses in Austin will require more than just turning on the lights.

“For example, childcare is a huge issue for this region,” Huffman said. “Another issue that rose to the top for all sectors is internet connectivity...there’s an equity component with that.”

Equity was also an issue with another element of reopening businesses: the Paycheck Protection Program, or PPP. Experts say PPP loans aren’t being dispersed evenly. One study found that 90 percent of businesses owned by minorities or women were denied loans. That’s why loan equity is one of the recommendations the task force gave to city and county leaders.

“For those that didn't know exactly how to work through those loan programs, it was a little bit harder,” Huffman said. “And so that makes these local programs even more important to make sure that we get at those parts of the community that didn't get access to those PPP loans.”

One of the business owners that couldn’t get access to a PPP loan was De J Lozada. She’s the founder of Soul Popped, a gourmet popcorn business with a storefront in Barton Creek Square Mall. She was denied PPP loans four times.

“It didn't matter,” Lozada said. “that I was doing really well in business and was looking at expanding and opening new locations before the pandemic happened.”

Even though malls have been open since early May, Lozada chose to not open up her shop due to safety concerns.

“There's no way to properly social distance in my storefront,” Lozada said. “My store front is a whopping 850 square feet, front and back, the back end of the house too. There's all these requirements for new signage and new procedures and cleaning procedures. None of that's free.”

But another factor in Lozada’s decision to not reopen is one troubling a lot of retailers: when you can only open at 25 percent capacity, can you make enough money to stay open? For Lozada, the numbers didn’t pan out.

“I can't speak about the other retailers, but at 25 percent, I run the risk of restarting payroll and then going further into debt because the traffic is not there,” she said.

And Lozada isn’t alone.

“There are a lot of businesses that at 25 pertcent occupancy it just doesn't make financial sense,” Huffman said. “So they're waiting for that next benchmark when they can open up at 50 percent. The decisions are all over the map. If you drive around to any part of this region where there were a lot of restaurants, you will see those decisions as you drive around.”

But whether opened or closed, businesses around Austin find themselves navigating uncharted territory and bracing for another possible shutdown. If there is a spike in Covid-19 cases in Texas, stores may have to shut down for a second time. And according to Rapaport, many shops may not survive a second wave.

“That second punch might be a knockout,” Rapaport said. “I hope it doesn't happen. I really don't. But we'll just have to wait and see.”

Businesses across the state find themselves in a delicate balancing act, wondering if they’ll find themselves having to rebuild their businesses from nothing. Lozada, who opened her business with just $53 four years ago, was looking at expanding her locations. But now the future is uncertain.

“I can't stay close forever,” Lozada said. “But you know, nothing comes before health. If I have to put my business on pause, at least I'll be alive to rebuild it later.”

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