There’s no doubt that the COVID-19 pandemic wreaked havoc on the U.S. economy, especially damaging small businesses. Based on business listings, by the end of 2020, an estimated 9.1 million small businesses closed temporarily or permanently and 9 million jobs were lost.
The Economic Tracker, a project based at Harvard University, reported in June that there were 37.5 percent fewer small businesses open nationwide compared with January 2020, two months before the pandemic swept the U.S. In California, small businesses declined 39.1 percent.
While most analysts talked about the economic devastation, there was encouraging news. The pandemic led to a surge in startups.
In the third quarter of 2020, there were about 1.5 million new business applications nationwide – an increase of 77 percent from the second quarter and more than double any quarterly report from 2004 to 2017.
“All entrepreneurship starts with problems,” Patrick J. Murphy, the nation’s 2017 Entrepreneurship Professor of the Year, told Forbes in January. “And when there is an economic downturn, a pandemic, natural disaster, or another kind of system-level problematic situation or disruption, you can expect the entrepreneurial sector to rebound against it.”
The surge in startups is based on customer preferences resulting from the pandemic; the emergence of business systems that allow companies to stay in operation, despite a lockdown; and necessity. As jobs losses mounted, entrepreneurship was incentivized.
Many startups focused on pandemic-related services — social media; online classes; consulting; digital marketing; delivery services; fitness and wellness; workplace solutions; and commercial cleaning.
We saw this entrepreneurial surge in Kern County and specifically at the Small Business Development Center at California State University, Bakersfield, where consultants help existing small businesses and startups.
Following are the stories of just three SBDC clients — one, who was on the verge of launching her yoga studio business when the pandemic hit; and two, who took giant leaps of faith to begin their businesses during one of the nation’s worst economic downturns.
With the goal of establishing a full-range Yoga practice, Alicia Tercero-Nourse planned to have a soft opening of her traditional, science-based studio in late 2019, with full operation in 2020. Then the pandemic hit.
“I went completely online. I held classes daily online and once the economy began to reopen, I felt the need to really get the physical studio going,” Tercero-Nourse said. “Because I was online during the pandemic, I was able to easily transition my students to an in-person and online studio.”
With seven employees, Tercero-Nourse said, “I still have students that like to stay online now, so it is a great asset to my company. I don’t believe I would have tapped into it if it weren’t for the pandemic.”
Tercero-Nourse credits her father, Guillermo Tercero, the long-time owner of Quality Lock Inc. in Bakersfield, for encouraging her business formation and giving her advice.
“I was also able to get into a mentorship with the CSUB SBDC, which made me much more prepared for opening the studio,” she said. “Since starting the mentorship with (SBDC consultant) Jim Keeler, I was able to streamline my process of opening.”
Explaining her consultant was instrumental in giving her advice, Tercero-Nourse added, “I run this business myself, so having a business expert there to answer random questions and just hear me out was priceless.
Williamson Mead and Brewing
A producer of meads, ciders and craft hard seltzers, Matthew Williamson is in the process of opening a full-service winery with his wife, Gina, in Bakersfield. The business started in June 2020. Mead is an alcoholic beverage created by fermenting honey with water, and often with various fruits, spices, grains, or hops.
“What started as a passion for making meads has turned into a profession,” Williamson explained. “After winning awards in commercial mead competition and the constant support of everyone who had sampled the work, it only seemed a natural progression.
“The pandemic gave me more time to be home to work on recipes and to perfect processes,” said Williamson, adding that his goal is to create a world-class tasting room and winery in Bakersfield.
SBDC consultants Jim Keeler and Maureen Buscher-Dang have been providing Williamson support and advice ranging from marketing to raising capital and to keeping up Williamson’s “flagging spirits. They’ve been great,” he said.
“The bedrock of the company and its formation was created with the direct help of the SBDC. Without them, we’d still be in the ether. Thanks to them, we have a guiding light, with which to navigate through.”
Mario Kepich Jr.
California Tankless Solutions
DBA Alliance Construction Technologies
Mario Kepich and his wife, Janelle, operate a general contracting business that specializes in construction methods and green technologies. They also specialize in retrofitting commercial and industrial heating systems with high-efficient tankless water heating systems. The business has four employees and also relies on a network of subcontractors.
Founded during the peak of the pandemic, Kepich acknowledges that “some people called us crazy and for a while we thought we were. But we knew if we could survive through a pandemic, we would thrive when it was over.”
The motivation for starting the business was the founders’ belief that there was a need for a local company to properly install and service the increasingly popular tankless water heaters on a commercial and industrial level.
To survive a pandemic, Kepich knew his company must be recognized for its good work quality, good customer communications and determination not to cut corners. He credits his strong faith in God, a lot of patience and humility for his company’s success.
Kepich and his company receive accounting, marketing, and federal and state procurement assistance from the consultants at the SBDC Bakersfield.
“The results are great. We see where we were doing a lot of things the wrong way at first. Now, through the SBDC, it has helped steer us in the right direction,” he said.
The Small Business Development Center at CSUB is one of five service centers within the Central California SBDC Regional Network. The SBDC in Bakersfield is a partnership with the U.S. Small Business Administration.
The center assists small business owners in Kern, Inyo and Mono counties by providing free consulting, small business training and research. For more information, go to www.csubsbdc.com
Kelly Bearden is the director of the Small Business Development Center at CSU Bakersfield.