Business

Cedar Rapids entrepreneur thinks 15 percent of small businesses could shutter

Debt may result in continued 'trickle' of closures, Steve Shriver says

Steve Shriver, co-owner of Brewhemia, is seen May 6 at the coffee shop in southeast Cedar Rapids. After shutting down du
Steve Shriver, co-owner of Brewhemia, is seen May 6 at the coffee shop in southeast Cedar Rapids. After shutting down during the early stages of the coronavirus pandemic, Brewhemia has recovered “back up to 75 to 80 percent of where we were pre-COVID,” Shriver said. “But it’s taken a lot of ingenuity.” (Jim Slosiarek/The Gazette)

CEDAR RAPIDS — As coronavirus shuttered the economy in March, Steve Shriver had a coffee shop where no one could safely enjoy an espresso and a 500-person event space without any events to host.

Shriver, the owner of Brewhemia and four other area small businesses, had a firsthand look at the impact of coronavirus on small businesses. Now he’s forced to adapt his businesses to a new mid-pandemic reality.

“The revenue that we knew pre-COVID just doesn’t exist anymore,” Shriver said.

Shriver recently discussed the challenges he and other small businesses owners are facing during this unprecedented time in an interview with The Gazette.

Q: From your perspective, how are small businesses doing during the pandemic?

A: “It’s been terrible. I’m seeing, right in front of our eyes, businesses go under. ... The positive is that I’ve seen a lot of innovation occurring and people really digging in deep to maintain relevancy.”

Q: How many small businesses that were in business at the beginning of the pandemic do you expect to still be open at the end of the pandemic?

A: “That’s a really difficult question. I’m guessing that 15 percent of small businesses are going to go under. ... Typically small businesses are teeter-tottering on make-it-or-break-it every week anyway. So when you go from revenue that can at least keep you existing to no revenue at all or less than half of your revenue, that’s going to put people in a very vulnerable position.”

Q: How much of small business closures are behind us versus still to come?

A: “We saw a lot of businesses fail right off the bat when you go to zero revenue or close to zero revenue. ... I think it’s going to be just a slow trickle of failure that’s just going to continue to happen. The long-term effects of it are going to be terrible too. Most of us are going to accumulate more debt during this time frame.”

Q: How are your businesses doing?

A: “Overall, doing pretty good. We voluntarily closed all of them for a period of time just to be socially responsible and to also keep our employees safe. Most of them are doing pretty good. The one that is struggling the most would be the Olympic South Side Theater, which is an event venue that can fit 500 people. Right now, people are not having events.”

Q: How is Brewhemia doing when you might not necessarily have as many people comfortable having a cup of coffee inside?

A: “It’s tough enough when your business model is based on a bunch of $5 transactions. That makes it fairly difficult just to be sustainable. We went to online ordering only and carryout only, so we’re not even letting people in our doors. ... Immediately, it’s almost like starting over. Now that we’ve started to get some of our rhythm back and some of our customers back and we’ve got outdoor seating, we’re probably back up to 75 to 80 percent of where we were pre-COVID. But it’s taken a lot of ingenuity.”

Q: I’ve heard about people spending more time outside during the pandemic. Has that helped SOKO Outfitters?

A: “Yes, it has. There are these small pockets of hope you see, especially as a small-business person ... Our sales are down a bit in most of our categories, but they are up in camping, so we’re selling more tents, sleeping bags, backpacks and hiking shoes. The challenge is it’s just offsetting the sales that are being compromised in other departments. The good news is at least we have one department of our business that is up.”

Q: How long do you think it’ll take to get back to pre-pandemic level of business?

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A: “That’s the million-dollar question. If the pandemic was over today and it was just done, I would say in three to six months, we could earn our way back into some level of sustainable business momentum. Not knowing when there will be a cure or things will normalize, I’m guessing it’s going to be a year.”

Comments: (319) 398-8394; john.steppe@thegazette.com

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