Glenn Jordan
Portland Press Herald, Maine
WWR Article Summary (tl;dr) As Glenn Jordan reports, the increase in business startups in 2020 is a national trend. So much so, that its participants have earned their own nickname, “covidpreneurs.”
Portland
A week before the coronavirus pandemic hit Maine hard in March, the corporation that employed Jennifer DeChant decided to eliminate her position in government relations.
Actually, she was given a choice: She could keep her job on the condition that she relocate to upstate New York. She declined.
DeChant took stock of her situation and her options. All around her, restaurants and shops were closing. People were being furloughed or laid off. One of her two sons had a health scare.
All of it caused her to evaluate her priorities. She wanted to continue working, but closer to home. She wanted something that would involve her family and, as the former executive director of Bath’s Chocolate Church Arts Center and a former Maine legislator, “something that works with my deep love and affection for the city of Bath.”
Which is how, in late June, she found herself signing papers to take ownership of the Bath Sweet Shoppe on Centre Street.
“Opening a candy store in a pandemic is kind of a crazy idea,” she said. “But the other part of this is that candy and chocolates are, for some of us, a coping mechanism.”
Starting any kind of business in the midst of a pandemic is certainly not for the faint-hearted. Even so, more Mainers seem to be forging ahead despite the fragile state of the economy and the uncertainty surrounding the rapid spread of a virus that can be deadly.
New business applications are rising. According to the U.S. Census Bureau, Maine entrepreneurs filed 3,132 applications for Employer Identification Numbers in the third quarter. That’s an increase of 60 percent from the second quarter and, perhaps more tellingly, a jump of 42 percent over the same three-month stretch in 2019.
The number of limited liability company, or LLC, filings between mid-March and late October rose by 329 over the same period last year and 680 over the same period of 2018, to a total of 5,612, according to the Maine Secretary of State’s Office.
The increase in business startups is a national trend, and its participants have even earned their own nickname: “covidpreneurs.”
“Some conditions are very favorable,” said Nancy Strojny, a 10-year volunteer with the Portland chapter of SCORE, a nonprofit organization that provides free and confidential business mentoring services. “If you have a good credit score and you have some collateral, banks are willing to put money in your hands. In addition, almost all the economic development engines in the state are offering grants or loans of up to $10,000.”
PROFESSIONAL CROSSROADS
Another factor, Strojny said, is that with some exceptions — hello, working parents — a lot of folks are finding themselves with more time on their hands. With that time, they’re taking stock. Is their current job stable? Is it fulfilling? Do they aspire to something else?
Starting an online business doesn’t require the same amount of funding necessary to get a brick-and-mortar business underway. Beyond the cost of forming an LLC ($175 with an annual renewal fee of $85), a website or even a Facebook page could get the ball rolling.
“There’s very little overhead,” Strojny said of an online operation. “If you can get some market traction and social media presence, you can pretty much start a business without any market capital.”
Online sales are currently the focus of The Sweet Sea Co., a vegan cookie venture launched last month by Leigh Kellis, who founded and remains co-owner of The Holy Donut, now in its ninth year. A portion of Sweet Sea’s profits are earmarked for Less Plastic Portland, an organization Kellis started to help reduce the amount of plastic in the ocean.
Plans for the cookie venture have been in the works since June 2019. Kellis, whose teenage daughter is a competitive surfer, packages her cookies in a clear wrapper that looks like plastic but actually is made of plant-based cellulose. At $9.95 for three cookies, the treats don’t come cheap. They’re also available at select local restaurants (El Rayo, Monte’s Fine Foods) and markets (Lois’ Natural, GoGo Refill).
“I’m trying to figure out how to get the costs down and give away more money to our mission,” Kellis said. “Right now, it’s a little out of balance.”
She recently rented space at 89 Market St. (formerly the Old Port Sandwich Shop) for her cookie venture. There will also be gifts, a piano and an art instillation. Because the pandemic has forced so many businesses to close, retail space is more abundant. Kellis said she’s been able to negotiate better terms with potential landlords, including what would happen if the governor sees fit to issue another business shutdown due to rising coronavirus transmission rates.
“If in six months we can’t have customers in the store at all and I can’t pay rent, let’s talk about that now,” Kellis said. “It actually gives people the opportunity to start something now without a huge risk.”
PANDEMIC OPPORTUNITIES
Karen Rich of Malone Commercial Brokers said pandemic-induced turnover has created more opportunities for incoming businesses, “and in very good locations that you couldn’t normally find,” such as Portland’s Old Port.
Rich also pointed to low interest rates for people looking to buy a building and set up shop within it. The relocation to Maine by out-of-staters leaving urban areas with higher transmission rates is another factor. If they can’t work remotely, they may look to buy a local business.
“If I’m looking to start a business and I want to be on the Portland peninsula, this is definitely the time to do that,” Rich said. “I hate to sound too optimistic, because it is hard on some businesses now. Some businesses are going to be closing. But there’s always someone coming in who’s saying, ‘I can do that. I can run my restaurant here. I can weather the storm.’ “
Back in March and April, Aury Souvenir wondered whether his new business would even get off the ground, much less weather the storm. He launched GSD Home Improvement in February and had only one job lined up before the pandemic hit, and that job wasn’t due to begin until July and would take only two days to complete.
“I wasn’t sure I was going to make it,” said Souvenir, a 25-year-old graduate of Deering High and the University of Southern Maine who is originally from Burundi. “It was difficult losing the two months.”
By late spring, however, folks stuck at home were clamoring for Souvenir’s services, which include exterior painting, general carpentry and landscaping. He had planned on using money earned in May to buy paint sprayers, two riding mowers and a larger trailer, but without any income that month, he instead wound up getting a $25,000 U.S. Small Business Administration loan from Coastal Enterprises Inc., or CEI, supported by the federal CARES Act.
Souvenir had begun working for a painting company when he was a college sophomore and eventually became an independent contractor. Had his venture fallen flat, he could have returned to that.
But GSD, which stands for Get Stuff Done, didn’t fall flat.
“In June, that’s when a lot of people started calling me back,” he said. “I did a bunch of estimates, lined up enough work, and in July we were able to get started and now we’re still working.”
Souvenir has one other employee on his payroll and half a dozen independent contractors. Eventually, he plans to expand to full-house renovations with the exception of roofing, foundation, electrical or plumbing work. His first-year goal was to reach $200,000 in revenue.
The pandemic thwarted that goal, but he’s closing in on $145,000 as he finishes up one final exterior project and is already planning for next year.
He’s considering a move into new construction and shifting more of his landscaping operations to commercial entities, such as condominium developments.
After making careful plans for revenue, expenses and hiring with help from a business mentor at CEI, Souvenir had to be nimble.
“We had to change everything,” he said. “It’s been stressful, but construction is one industry that really did not get hit that much. We ended up receiving a lot of demand.
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UP FOR A CHALLENGE
Zainab Alrammahi, who earned a degree in business administration from Southern Maine Community College in 2018, launched Biddeford-based Global Home Healthcare in late May after three months of completing all necessary paperwork to receive licensing and approvals. Her business provides home health aides for a mostly elderly client base, assisting with meals, laundry, dressing and exercise.
It was something Alrammahi had done as a student, so she knew the ropes. She started with two employees and now has 10, including her husband.
“I feel like there has never been an easier or a better time to start a business,” said Alrammahi, 27, who was born in Iraq and spent seven years in Syria and two more in Turkey before coming to Maine when she was 20. “I’m really happy to be part of Maine. It is a good place to study and to do business.”
She said her biggest challenge was finding capable and qualified employees, particularly during a time when a federal relief package provided an additional $600 per week in unemployment benefits. Alrammahi said she plans to double her staff in the next year and is also mulling other business opportunities.
“I’m really happy with the results so far,” she said. “I can see a lot more things to do.”
Last winter, Karla Brannen of Falmouth considered leaving the Portland accounting firm where she had been a senior tax manager in order to start up her own practice. The pandemic’s arrival gave her pause. Accounting was declared an essential service, but there were still plenty of unknowns.
Going from a regular paycheck with a health plan and retirement benefits to generating your own income and delving into the health care marketplace was a challenge, but one that Brannen eventually decided to embrace. After helping her previous employer through the Oct. 15 tax deadline, Brannen opened her accounting business the following Monday.
“I wanted to have a little bit more control over my work schedule and being available for my family,” she said. “I decided that working for myself was a better option than trying to work for somebody else.”
Brannen, 37, grew up in Smyrna Mills, where her father had a logging company and where her parents now run a maple syrup and honey business. The idea of being her own boss was a familiar one.
“I’ve always been an employee,” she said, “but having grown up with parents who are self-employed and having several friends who have gone out on their own and were successful doing so, everyone always says it’s the best thing they’ve ever done.”
LEARNING ON THE JOB
Back at the Bath Sweet Shoppe, Jennifer DeChant remains optimistic. When her son was much younger, she would bring him to the shop and buy foil-covered milk chocolate in the shape of cars. After buying the place in June, that was the first item she added back to the inventory.
Her son, now 16, now works the register and at this point is the only family member getting paid. His 12-year-old brother dusts and packages. Her husband keeps the website running while DeChant, 52, handles taxes, merchandising, inventory, vendors, credit and personnel. They kept the shop open seven days a week in July and August, and will be doing so again after Thanksgiving.
“We’re learning on the job,” she said. “I take feedback from customers very seriously. I enjoy learning about the difference between Swiss fudge and regular fudge and I can talk about that kind of stuff all day. And my family is having a good time, too, and we’re all involved in it.”
Already, DeChant has partnered with a local florist for a flowers-and-candy package deal and a local photographer for gift cards. For Halloween, given the ongoing pandemic, she made the conscious decision to avoid anything overly creepy. She didn’t carry gummy body parts or candy eyeballs. She opted for cute and happy.
“I realized it was a risky time to start a business, but I also determined that the risk was worth it,” she said. “We’re going to white-knuckle this like everybody else this year, and next year with tourists, but this will be an opportunity. I’m learning so much now, and I’ll be able to apply it in a bigger scope when the economy recovers or adjusts itself again.”
Besides, she said, “if you’re not having a good time in a candy store, something’s not right.”
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