Risking it all: Small business, the backbone of the Va. economy, fights to survive COVID-19

Risking it all: Small business, the backbone of the Va. economy, fights to survive COVID-19
821 Bakery Cafe advertises for customers that they are still open in Richmond, Va., March 18, 2020. (Source: Parker Michels-Boyce for the Virginia Mercury)

None of this was Pat Elliott’s fault.

He’d done everything right: never late paying his taxes, his vendors, the bank or his $3,000-a-week payroll to employees of the Campus Drive-In, for generations a social hub in Gate City, near the Tennessee line.

Then one day in March, the world flipped upside down because of a predatory virus unheard of three months earlier.

Most days, the Drive-In dining room teemed with patrons, many of them 60- to 80-something retirees who grew up on its burgers, shakes and fries. A home-sheltering order Gov. Ralph Northam imposed to slow the coronavirus spread closed the dining room and relegated Elliott to curbside, carry-out and home-delivery sales.

“We never did delivery before, but you do what you have to do to turn a dollar,” said Elliott, who sank his law-enforcement retirement into buying the beloved Gate City landmark that opened in 1955. With revenue down by two-thirds to three-fourths, he figures he can hold out at best another 40 days.

Across Virginia, the story is the same for tens of thousands of restaurants, shops, salons, spas, gyms, theaters, transportation services, malls — many at risk of disappearing because of the COVID-19 pandemic.

For Elliott and other small entrepreneurs who risk everything, the stakes could not be higher – the stuff of cold sweats and sleepless nights.

It’s important to society as a whole, however, that small businesses emerge from an economic catastrophe that, in just six weeks, has left more than 30 million Americans (500,000 in Virginia alone) jobless – a 15 percent national unemployment rate that is the highest since the Great Depression.

In Virginia, small businesses, a definition that could mean just a handful of employees or hundreds, accounts for half of all employment and 96 percent of all business entities, said Fletcher Mangum, a Richmond-based economist.

While lockdowns in Virginia and other states have waylaid businesses of all sizes in almost every sector, they’ve hit small businesses particularly hard. Mangum said that foodservice and beverage businesses constitute 58 percent of Virginia businesses with 50 employees or fewer.

The longer lockdowns last, the harder it is for small businesses to rebound, said Mangum, who has been appointed to Virginia’s Joint Advisory Board of Economists by Northam and his predecessors, Govs. Bob McDonnell and Terry McAuliffe.

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The Virginia Mercury is a nonpartisan, nonprofit news organization covering Virginia government and policy.