Being an entrepreneur and a small business owner during the pandemic has been a challenge. Small businesses everywhere are fighting to stay open and to remain profitable. Seasonal businesses especially have faced challenges, such as Parkbus, an express bus service from city-to-park with more than 50 outdoor destinations across Canada. Seasonal businesses have a short window of time to operate and with the even more narrow guidelines COVID-19 has put on companies, businesses have been stuck for over a year.
“It’s very hard to predict where we’ll be after this pandemic. Right about now is normally when we would start to fill up our bookings for the summer,” said Alex Berlyand, the co-founder of Parkbus. According to Berlyand, it’s been almost impossible to sustain the cost of Parkbus’s operations since vehicle capacity has been cut in half. Navigating regional lockdowns has also been a challenge and the upcoming summer season will look very different with a high level of uncertainty of where the pandemic will take us next.
Before the COVID-19 pandemic, Parkbus experienced sold-out seasons and bookings taking place far in advance. Since the pandemic began, there has been a decline in tourism, costing the country $15.7 billion in lost revenue. Now, the company has taken about $60,000 in loans just to keep open throughout the pandemic. Company employees on payroll also went from ten to two.
Experts are warning small businesses about the challenges that lie ahead
The government has lent support to thousands of small businesses; however, they will need to face the reality of paying the debt they have accumulated during the pandemic. Experts are warning businesses about the challenges that lie ahead as an economist at Royal Bank of Canada said that businesses that carry the legacy debt will have to compete with new companies that do not. With the emergency rent subsidy expiring in June, support will be taken away which can leave businesses vulnerable, and options limited between selling the company or filing for insolvency.
Founder of BIO RAW, Oren Epstein, said that his company does not qualify for CCAA, however, he stated that he refuses to let his business go. Since the pandemic, the company has taken on $300,000 of debt just to survive. Many small businesses are feeling the negative effects of the pandemic, especially because they make up almost 98% of all employer businesses in Canada. Recent data has suggested that more than 200,00 Canadian small businesses may have to close permanently due to the effects of the pandemic. This unfortunate situation would impact three million private-sector jobs.
“The more businesses that disappear, the more jobs we will lose and the harder it will be for the economy to recover,” said Simon Gaudreault, the Canadian Federation of Independent Business’s senior director of national research. Many small business owners agree that government support is just not enough. Oren Epstein also commented on the fact that there have been increases in the prices of supplies and ingredients that keep the business running. “Insolvency and bankruptcy are always at the back of our minds, but it’s an option we’d rather not be forced to take,” he said.