Sebastopol symbolizes towns trying to keep small businesses alive and well

Operating a small business never was easy. The coronavirus outbreak has made it much, much harder.

The future is ominous for many of these companies, which employ about half of the private workforce in the United States and a significant number in Sonoma County.

A report by consulting firm McKinsey and Co. found that between 1.4 million and 2.1 million of the nation’s 31 million small businesses might have closed permanently during the first four months of the pandemic.

On the local level, the plight of the sector can be seen through the lens of the town of Sebastopol, a progressive city of about 8,000 residents who pride themselves on shopping local at an estimated 150 area small businesses. It’s a place where four area grocery markets compete against the Whole Foods and Safeway chains and a half-dozen local coffee shops do battle against two Starbucks locations.

But a trip through the west county town shows concerning unevenness. Some businesses are bustling, such as Sebastopol Hardware, while others remain closed and locals wonder if they ever will reopen. At least two have closed their brick-and-mortar locations. Scout West County went dark last month in The Barlow, a trendy shopping and eatery center. The owners noted in a Facebook post the closure “comes at a time where the climate of country, community and future is heavy with uncertainty.”

The Indigo Denim Bar along the Main Street announced in April it shuttered to pivot to online sales. Owner Annie Bignon wrote in a Facebook post the closure was necessary “to secure our future long term, as we weather this storm.”

There is growing realization among local small business owners that they are all in this battle for survival together, and the effect of more shutdowns also will have a negative effect on them.

“That also can lead to a downturn in their businesses,” said Rob Eyler, an economics professor at Sonoma State University who closely tracks the local economy. “If some of those businesses go out of business, there will be less of a foot flow going in naturally (to other stores.)”

This even applies at Sebastopol Hardware, which has experienced revenue increases from 10% to 15% during the past three months because as an essential business county health officials enabled it to stay open, said co-owner Dan Allingham.

The customers first clamored for essentials such as cleaning supplies, and that has shifted to barbecue supplies and items for home improvement projects and outdoor patios.

“We can't get umbrellas and umbrella bases in. That's a shortage everywhere because everyone's outside,” Allingham said.

The sales boost also came from people buying new vacuums and Yeti ice chests, instead of traveling and eating out, he said.

“There was a lot of places where they spend on meals or vacations, but they can’t spend that, so now they got that extra income and what can they do with it?” Allingham said.

The store, a Sebastopol fixture for decades despite the rise of Home Depot and Lowe’s national chains, has had to cancel its Super Saturday discounts at the first of the month, as well as senior discount days in order to better manage customer flow and keep social distance between workers and customers.

Sebastopol Hardware has not laid off any of its almost 70 employees. It adjusted hours of the store, but did not cut employee pay, he said. For example, full-time workers still are being paid 40 hours a week even though they work 32 hours and part-timers are paid for 30 hours while only working 24 hours.

The store also spearheaded a local effort with other merchants to buy lunch for employees — with daily purchases that could be more than $1,000 — from Sebastopol-area restaurants to help ease the financial blow to eateries that have had to rely on takeout food service or reduced outdoor seating. It also offered a 10% discount for customers who brought in a receipt from another local business. In his time with the store, Allingham said he has realized the customers “will support you” if you are locally owned.

“Once it (money) goes into their business and that would trickle down to their employees. And their employees will help other small businesses by going to the coffee shop to buy through the window or being able to buy a dress at a shop,” Allingham said.

One of the local coffee shops is Retrograde Coffee Roasters, which opened in January 2017 on Main Street after founders Danielle Connor and Casey Lanski expanded from sales at farmers markets and other events.

After dealing with nearby floods, power shut-offs and wildfire evacuations last year, the couple was bullish on 2020 and wanted to expand their inside seating area. However, the county’s public health emergency stay-at-home order effective March 18 has reduced sales at the coffee shop by about 40%. So Connor and Lanski have revamped the business to sell more online and deliver coffee and related accessories to local customers.

“We're in a community of seniors and I know this time is extra hard for them,” Connor said. “We also felt that by offering more home goods like flour and sugar and yeast, and things like that, that people could rely on us and take a little bit of pressure off the grocery store.”

Retrograde has opened a section for limited outdoor seating, but there have been adjustments. It had 15 employees they were able to bring back as a result of a federal small business loan of slightly more than $100,000. Still, the coffee shop had to let go of two workers.

“We're able to keep going and we make decent sales, ... but we're not doing as much prepared food and drink,” Connor said.

The couple wants to continue with an expansion that would double its cafe space, and their landlord has been supportive of the project. However, Connor said the city of Sebastopol has not been as responsive.

“It feels very weird and just almost like not right to expand our business during a time where we've experienced such a slowdown. But we're just trying to maintain optimism and hope that we'll be busier and just kind of pivot until then,” she said.

Optimism is what Ky Boyd, owner of Rialto Cinemas, is relying on after he closed the night of March 17, hours before most other businesses deemed nonessential shut down countywide as the coronavirus threat escalated. The closure forced him to lay off about 20 employees. It has been financially tough for him because his landlord has given no concessions on rent payments.

“It’s been challenging,” Boyd said, in an understatement.

He has tried things like popcorn pickup sales, and Rialto is part of an online streaming service for select films, where it receives a cut of the purchase price. Boyd even checked if he could show movies outside on a large screen similar to a drive-in, but that proved not workable.

His revenue fallback efforts have generated “dimes and nickels,” in the pandemic, he said. But Boyd has been encouraged by a few loyal customers who have made generous donations.

The theater is exploring whether it could reopen by the end of July with a system in which each customer would get an assigned seat spaced far enough from other people.

An even bigger challenge is having movie studios provide new films this summer so that people will want to come out, he said.

“There's only one Warner Brothers. There's only one Universal. There's only one Sony. There's only one Disney,” Boyd said of the few large studios that control much of his movie choices.

Like other small businesses in the area, Boyd is grateful for the local support but wonders if that will be enough to keep the Rialto sustainable as the months start to pile up without progress.

“Starbucks will survive,” Boyd said. “The longer this goes on, the more precarious it is for all of us that are small businesses.”

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.