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- The coronavirus outbreak has hit many US businesses hard — one survey found that 75% of small businesses saw fewer sales in March.
- It's especially difficult for businesses that rely on face-to-face interactions, like bars and salons, or companies that host in-person classes like yoga studios and cooking schools.
- Business Insider talked to seven entrepreneurs who are trying to get some of their revenue back through virtual services on Zoom and FaceTime.
- Click here for more BI Prime content.
When the coronavirus outbreak forced the majority of US states into lockdown in March, it sent shockwaves through many businesses. But perhaps none were hit harder than companies that relied on face-to-face interactions to fuel their revenue — businesses like bars or salons, and companies that offer in-person classes, like yoga studios or cooking schools.
A Goldman Sachs survey from March found that 75% of small businesses were seeing fewer sales, and 51% of small business owners said their business could only continue operating for a maximum of three more months. Across the country, as many as one in five restaurants could close for good, putting millions out of work, and services like barber shops, hair salons, and other beauty services have been debilitated by the shutdown.
But the crisis — and the lasting toll it's expected to have on the US economy— has forced some business owners to get creative, moving their services online in an attempt to recoup some revenue lost over the past several weeks. Trivia hosts, chefs, winemakers, yoga instructors, and others are looking to videoconferencing services like Zoom and FaceTime as a new frontier, a way to host virtual sessions and classes and connect them with customers across the country — and the world — they would never have met otherwise.
One San Francisco sex toy company started hosting "build your own vibrator" parties over Zoom to engage customers with its products, Fast Company reported.
In some cases, it's only bringing in a fraction of what they were making previously, while in other cases, entrepreneurs are raking in more money than ever before.
Business Insider spoke with entrepreneurs across the US who have transitioned to virtual services over the last few weeks. They shared how they're finding customers, whether they've seen an increase or decrease in revenue, and what the future holds after life begins returning to normal.
SEE ALSO: 6 ways entrepreneurs can make the most of the coronavirus slowdown, from the owner of a hostel who hit record cancellations and has prepared for 3 months of lost business
SEE ALSO: Zoom is so popular in Silicon Valley, even a Google executive's child reportedly prefers it over Google's software
Stephen Walsh started a trivia business from scratch when the outbreak hit. Now, he's making more money than he ever has before.
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Stephen Walsh was hosting doing events on the Baltimore bar and restaurant scene when the coronavirus outbreak reached the US. His income dried up practically overnight.
He decided to turn to trivia nights, which he'd been hosting on and off for about 10 years, as a new source of income, but he never expected it to take off like it has.
For about 45 straight days, Walsh Trivia has been hosting three or more virtual trivia sessions every day, sometimes with as many as 300 participants at once. Walsh has such diehard fans in Alaska, he's added an extra session for their time zone. After one participant told their friend about the games — who happened to work for the American embassy in Islamabad, Pakistan — Walsh now has teams playing in embassies around the world. The embassy in Nepal even has two teams: Kathmandu and KathmanTwo.
Walsh uses a combination of Zoom and Google Forms to host the sessions, and he charges $3 per team "captain" and $2 for any additional player after that. The number of teams is capped at 40, and Walsh recommends no more than 10 players per team. Players pay him either by PayPal or Venmo.
Walsh said he typically hosts at least two games per night that are open to the public, and then some that are closed to specific companies or organizations, who are charged a flat rate to play. While he has social media accounts and has bought a few Facebook ads, he said the best marketing has just been word-of-mouth.
"I know that this is short-term, but it's been an incredible opportunity for me," Walsh told Business Insider. "I've never earned what I'm earning now doing any other job. In my dream world, I will not go back to doing any other job. I would love to do this because it doesn't feel like work."
Maggie Norris was initially intimidated by moving her cooking classes to Zoom, but said she thinks it'll make her business more successful long term.
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About 18 months ago, Maggie Norris had to shut down her Phoenix-based cooking school, Whisked Away, for four months after a flood destroyed her kitchen. Now, her cooking school has been shut down for a very different reason, but Norris said she's seeing it as an opportunity to take things online.
"My business has shifted more in the last three weeks than probably in the last five years," Norris told Business Insider. "I figured, well, you know what, if I can come back after a flood and not doing classes for four months, I can handle this."
Norris was hosting five or six cooking classes per week for hobbyist chefs, as well as local health clubs and the Desert Botanical Garden. About three weeks ago, she decided to try hosting a free class for some regulars on Zoom as she got comfortable with the process. Now, she's hosting four or five Zoom classes per week.
Norris charges $8 per device, which she said is significantly less than she charges for in-person cooking classes, but she's able to host more people — her home kitchen can only accommodate eight people, but she's hosting about 20 people over Zoom. Norris also expects to be able to ramp up the number of classes she does per week, since virtual classes only last an hour, versus three hours for in-person classes.
Norris has also started offering private classes for situations like company team-building, which she said are more expensive because participants are able to decide what they make, and the classes are more interactive.
"I was at a point in my business where classes were filling up as soon as I posted them," Norris said. "It's definitely not what it was, but actually I don't want it to be right at this moment because it's still kind of in a building process. But I'm hoping that it'll get to that point."
Ultimately, Norris said, the situation has a few perks, even though she's not making as much money as she was before the outbreak: her daughter is able to join her for all the classes, and she's able to have evenings free to spend with her family.
"I know the current situation has pushed many people out of their comfort zones, to say the least. Change is incredibly scary especially when you have a successful business that has run off of the same formula for years," Norris said. "Teaching virtual classes was never in the plan, but being pushed in that direction and taking advantage of the opportunity will make my business more successful in the long run."
Sarah and Brice Garrett own a 5-year-old winery in Paso Robles, California. While their tasting room shutting down has impacted the business, they've noticed an uptick in sales.
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Sarah and Brice Garrett, the owners of Serrano Wine, opened their tasting room two years ago. Up until the coronavirus outbreak hit, the couple worked in the tasting room every weekend from 3 p.m. until the last people decided to leave.
"The tasting room was important in cementing our role as winemakers," Garrett told Business Insider in an email. "It has been a huge piece of building our wine club and following, as well as establishing respect and brand recognition. We are very young for winemakers (26 and 27 currently) and that led to many not taking us seriously as a brand."
But the day that bars and tastings room shut down in California, the Garretts had to shift their business. They immediately started hosting wine tastings online, first over Instagram Live and then over Zoom, in order to stay connected with their customers.
But hosting an online wine tasting presents a different set of challenges than an in-person tasting — namely, ensuring everyone is drinking the same wine. To that end, the Garretts allow two weeks to purchase a four-bottle bundle of wines for $125, shipping included. The actual tasting itself, held over Zoom, is free. Once customers receive the wines, the tastings are held over two consecutive Fridays so that participants aren't forced to open four bottles of wine in one night, Garrett said.
The Garretts have hosted five tastings so far, and at the most recent event, had 18 screens participating, each with anywhere from one to four people.
The outbreak has affected Serrano Wine's business on multiple fronts. Garrett said the winery hasn't finalized any grape contracts or purchased new barrels for the upcoming season because things are so uncertain. And while sales are higher than normal, the winery is paying "quite a bit more" for packaging materials as a result. Garrett noted that when it comes to the virtual wine tastings, they're making significantly more per tasting, given that customers are buying four bottles rather than five one-ounce pours.
But even when things return to normal, the Garrets don't plan to end the virtual aspect of their tasting business.
"These tastings have given us a larger audience, and there is no reason for us to stop," Garrett said. "When we are allowed to reopen we will have to devote more hours to our tasting room, but we want to make time for at least one virtual tasting experience per month."
A hair salon in Brooklyn is sending clients quarantine color kits.
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Nicci Jordan Hubert is the cofounder of The Bird House hair salon in Brooklyn, New York. She and her sister Brooke Jordan were forced to close their doors on March 15th and lay off all their stylists. "You still have a job when this thing is over," Hubert told her employees over the phone. "Leave all of your supplies in your drawer because the second we reopen you'll come back to us, please."
Hubert and Jordan were saving up with the goal of opening a second location, but they instead used that money to give their employees a couple more paychecks, then provide for their own families during the pandemic.
Hubert said they've lost 95% of their monthly revenue, but gift certificates and at-home color kits have kept minimal income coming in. The salon sold out of its first batch of 100 Quarantine Color Kits, which provide clients with everything they need to touch-up their roots or apply all-over color for $75 to $150. Existing clients already have their hair-color formulas on file, but new clients need to upload a well-lit photo or schedule a FaceTime consultation. "It's in imperfect science, but it is better than nothing," Hubert said.
Most services, like cutting hair and applying highlights, Hubert said just can't be done from a distance. But she said she's spending every day thinking about what her clients and stylists need.
"We believe very, very strongly that hair care is a form of wellness, she said. "So for me to have that ability to color my roots and still feel just a little bit like myself during this quarantine, I feel so grateful that I can do that. And I feel so grateful that we can provide that for our clients."
A yoga studio in Washington, DC, is maximizing class sizes with livestreams.
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Jennie Light owns Bluebird Sky Yoga and art studio in Washington, DC. She wasn't sure how to react when the mayor and CDC were first warning of shutdowns, but she tried to stay open for as long as possible, ramping up regular cleanings and researching what other yoga studios were doing.
"One of the trickiest things is battling the moral decision of what the right answer was, what the science actually says," she told Business Insider.
But when the city mandated the closure of all non-essential businesses, including gyms and fitness studios, Light had to come up with another way to keep her yogis happy. She started live streaming classes over Zoom, offering four classes per day. The next week, the studio got back to its usual daily schedule of about seven classes.
The studio also started a new calendar of workshops, like a Thai yoga massage workshop which couples and friends could do together on Zoom. Light or one of her managers handles technical support for every class to keep them interruption free and secure from cyber intruders. "That's an aspect of our business that we never had to deal with before," she said.
She has two part-time employees, who she's kept on payroll with help from a PPP loan, but her 31 instructors are independent contractors and therefore, are not covered by the government emergency funds she received.
Light said revenue has decreased by 30% from March to April. Membership hasn't dropped significantly, but the studio is losing some people who have lost their jobs or are struggling financially. On the flip-side, going virtual has opened membership to people across the US and even other countries like Canada and France. "It's made up for some of the membership loss, but not all of it," Light said. "You can have more students in a class than we could fit physically in our space."
Virtual classes are flexible for parents who had difficulty juggling their schedules and finding childcare before the pandemic. That aspect has gotten Light to consider offering virtual options even after her classes return to the studio. "People could watch on their own time or they could have a kid running around the background, no big deal," she said.
The owner of an art studio and gallery is trying virtual paint and sip events to keep her community alive.
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Delilah Martinez started her art studio, VIP Paints, seven years ago by inviting friends and family into her apartment for paint and sip parties — which her landlord allowed her to do until she outgrew a second apartment and moved her business into a storefront. The space now doubles as Vault Gallerie to host artists in the Pilsen neighborhood of Chicago.
After surviving years of gentrification, rising rents, and corporate competitors, Martinez said she was finally gaining traction and financial stability by the end of 2019. Then coronavirus complicated things.
First, she tried to limit classes to 20 people. Then to 10. When it got to five people in a class, she tried rescheduling, hoping to reopen come April. It's usually a busy season, with lots of bachelorette and birthday parties. "I was devastated because we had many upcoming classes and private events that were all prepaid. Refund requests were flooding in," she said.
She refunded $2,000 in the first two days of closing the studio. That amount has more than doubled since. Martinez sold stickers online, but she knew that wouldn't be enough to pay rent. So she started hosting virtual painting classes on Zoom, which cost her more money upfront to get all the supplies to ship to customers. This meant she had to increase her prices to $30 to $40 per class.
So far, she's hosted four small virtual classes, but they've made up a fraction of lost business. Martinez is mainly doing it to keep her brand and community going. "I live in a really cool community where we all support each other and we've been trying to figure out ways to all help each other," she said. To her, art is a stress reliever, especially for people who need an outlet during these difficult times. "I'm going to continue because this is what I love to do."
A founder in Atlanta is tackling postponed weddings across the country with virtual planning sessions.
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Sarah Chancey founded her wedding planning company, Chancey Charm, as an online service that's grown to over 35 locations across the country owned by individual planners licensed to use the brand's name.
Since the pandemic hit the US, Chancey's team has had more than 50 postponed weddings, three cancellations, and over $40,000 in deferred or lost payments. A lot of spring and summer weddings have been moved to the fall, but some couples are pushing further — even into 2021.
But the planning doesn't stop. Now, virtual planning is even more important than before as planners face what Chancey said will be the busiest fall they've ever had. "It's going to really stretch us because we already had a very full fall season," she said.
The company has always leaned on technology, especially since it targets destination weddings and planners can't always meet their clients in person. All the magic happens in its online portal, where brides can get digital design boards, which map out every detail — from the flowers and dresses, to the color palette and decor. "This design blueprint really takes all of that anxiety away for them because it's giving them a chance to see it all in person."
Planners also meet one-on-one with clients on Zoom to go over their budget, timeline, and get vendor referrals. Chancey Charm has offered these services as part of its full-service planning, but since the pandemic, the company is also offering them separately for couples looking to save money and who want to plan most of it on their own, but can use some guidance along the way.
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