Last summer, Adam Chapman’s home cleaning business, Pad Pal, took off. The recent Carleton graduate worked full-time and hired new staff. This year, he was looking to continue the momentum.
But all that has changed since the COVID-19 pandemic caused his spring sales to shrivel.
Over the past month the economic fallout of COVID-19 has been widespread, with nearly one million Canadians applying for employment insurance within the first week of COVID-19 social distancing measures.
Non-essential businesses have been forced to close, but even essential services like Chapman’s are facing cuts.
In response to the economic impacts of COVID-19, the federal government announced a series of economic reliefs targeting small businesses—including paid sick leave, wage subsidies, and long-term loans.
The federal government also deferred the annual payroll tax from April until August, in an effort to keep money in taxpayers’ pockets.
With the uncertainty of COVID-19 looming over homeowners, Chapman estimated he’s lost upwards of $25,000 in sales due to a sharp decline in pre-booking for the coming months.
“Usually, on March 1, we’d have a whole call and sales team set up,” he said. “But with all the uncertainty and people getting laid off, it’s hard to call them about something in a month or six weeks to talk about window cleaning.”
Chapman also said he’s unsure whether he will be able to collect compensation from the government, as COVID-19 hasn’t forced him to pay workers sick leave. Rather, it has caused his sales to decrease, impacting his ability to hire new workers.
Chapman added he finds the criteria for wage subsidies difficult to understand.
“So far, I assume all these measures are going to help big businesses way more than me,” he said.
The pandemic has forced Chapman to make cuts. But, being a small business, he can’t offer severance pay.
“I’ve had to lay off four people. It feels awful.” — Adam Chapman, Carleton entrepreneur
For university students, the Canadian government has also added a six-month grace period to federal student loans. Ontario’s provincial government followed suit, extending the grace periods on OSAP loans.
Having financial support as an entrepreneur and a student is important for people like Taylor Russett, a fourth-year communications student at Carleton University, who runs a wedding and lifestyle photography business which has also been impacted by COVID-19.
“I have some clients in May who have not reached out as of yet,” Russett said of the uncertainty of his business.
“I have other clients in June and July who have called and said ‘I’m ready to pull the plug.” — Taylor Russett, Carleton entrepreneur
Russett said he isn’t panicking just yet, as the majority of his business takes place in the summer. For now, he said he is just trying to keep open communication with his clients.
COVID-19 is also limiting the guidance and support entrepreneurs can receive during these tough times with the closure of Hatch, Carleton University Students’ Association’s (CUSA) on-campus support program for small businesses.
The organization has had to cancel programming through to the end of the year, according to executive director Kathleen Quinn Steeves.
“These opportunities were really meant to uplift and engage students,” Steeves said. “It’s really disappointing to have to cancel them.”
With closure to CUSA businesses, Hatch directors will be laid off on April 3. They’ll continue informal pro-bono advising over the next few weeks and will “likely be rehired” after the exam period ends, according to Steeves.
Steeves added Hatch would be “ready to support students” with navigating federal assistance upon reopening. Right now they are emphasizing focusing on the positives, despite the frustration.
“Those who were not ready to launch yet, they see it as an opportunity to work on their business’ plan, work on their mission statements and work their websites,” Steeves said.
While Hatch’s businesses did not lose money due to COVID-19, as most are in the very early stages of operations and others are already funded, those seeking funding to get off the ground are now being asked to wait.
“It is hugely disappointing for those who were ready to launch.” — Kathleen Quinn Steeves, Hatch executive director
And while Chapman is doing his best to stay positive, he admits he’s suffering.
“I know my business will survive,” he said.
“Right now, I’m just trying to stay positive about it all, but it’s so much stress.”
Featured image from file.
