Building a business is never easy, but 2020 has been a unique calamity. In the U.S., which has suffered more Covid-19 deaths than any other nation, the economy entered its worst downturn in generations. Although central bank stimulus and government programs such as the Paycheck Protection Program have helped cushion the blow, a return to growth will depend on the creativity and resilience of millions of entrepreneurs and business managers.
For a glimpse at how it’s going, Bloomberg Markets talked to leaders of four small businesses and two arts organizations over several months. Their journeys have all been different, but they share a spirit of perseverance often lost in economic statistics. These are their stories.
LENORE ESTRADA Owner, Three Babes Bakeshop
FOUNDED 2011
HEADQUARTERS San Francisco
PRE-CORONAVIRUS EMPLOYEES 26
EMPLOYEES NOW 13
YoY REVENUE -42%
PPP LOAN $143,000
PPP RAN OUT July
When Google shut its offices in March, Lenore Estrada lost her biggest client. Her artisanal baked goods company, known for its $40 pies, supplied the tech giant’s cafeterias. More cancellations followed.
The timing couldn’t have been worse. After a decade sharing a rented industrial kitchen, Three Babes Bakeshop had started construction on its own kitchen and retail space in San Francisco’s Mission District. It was scheduled to open by May.
Instead, Estrada is $500,000 in debt, has cut her staff in half, and has taken over management of the construction site after a series of mistakes and delays. Her once-profitable company is racking up losses of $15,000 a month, and she’s running everything alone—Three Babes is down to one after two co-founders left in the past decade.
Estrada has overcome difficulties before. Now 37, she beat cancer in her early 20s after a year of aggressive treatment, only to lose both parents soon after.
“I’ve always been in a low-resources situation,” says Estrada, one of seven kids. “It’s challenging, but what choice do I have? After all that I’ve been through, you know, I think I can keep going.”
The pies are selling well online and at farmers markets. Estrada is experimenting with new offerings: pie-making kits, online baking classes, and selling packaged items through local bodegas and grocery stores.
Her goal is to open the new kitchen before she gives birth to her second child in early October. But things keep going wrong: The floors were poured incorrectly three times, and a leak in the industrial freezer spoiled $10,000 worth of pies and local farm produce one weekend in September.
She borrowed from the Paycheck Protection and Economic Injury Disaster Loans programs, through banks, and from friends—most of it personally guaranteed. “My fear is that I’ll spend the next 15 years paying it all off,” she says.
She’s eager to make good on her investment, but she says she’s driven by other factors as well. “Even if what happens is I pay my workers still working for me through November or December, whenever, and we fail, I’ve allowed them to continue paying rent, feeding themselves, supporting themselves.”
That spirit also led Estrada to start a nonprofit in March with a friend. SF New Deal connects more than 100 local restaurants with organizations that are providing food to marginalized people during the pandemic. (To avoid a conflict of interest, her company doesn’t participate.) A dozen employees helped supply at least 800,000 meals for people who otherwise would’ve gone hungry, providing stable work for local kitchens and their staff.
“It was an inspirational thing for me to work on,” she says. “I could keep working at my own small business, or I could also help a lot of businesses having the same problems and have an impact on the city.”