A COVID-19 Memoir

By: Kelly Gorsuch

Let's start from our harsh but shared reality:

Many of us will lose our businesses over the next several months.

Worse still:

This is due to no fault of our own. It is collateral damage of a virus, something that was unforeseeable and out of our control. Outside of a cure or a vaccine, there will be no silver bullet fixes. And even then, by the time we get to the medical breakthrough we're all hoping for, it may be too late from a financial and economic perspective for many of us. 

That's my standard disclaimer these days but, despite this bleak outlook, there's hope for our industry. I refuse to accept otherwise. 

The day I told my father that I was opening my first salon, he gently put his arm around me and said, "I don't think you should do that. What if you fail?" These are tough words to hear from your father when you're talking about the excitement of opening your first business, especially a father who himself was a salon owner. My answer to him had the hubris of youth, but I've thought back to it often as I reflect on how to weather this crisis in our industry: "So what if it fails? My talent can't be taken away from me. I'll just get back behind the chair for someone else."

I didn't spout much wisdom as a 20-something-year-old punk. Come to think of it, I still don't spout much wisdom today, as a 41-year-old punk. But those words have never been truer or more applicable than right now.  

In the last few weeks,

I've exchanged stories with people in politics and business from far and wide. Salon owners, restaurant owners, bartenders, politicians, product companies, doctors, and just about everyone in between. This I can tell you: no one is coming to save us. It's become clear to me in recent weeks that the white-collar individuals who run Congress and our state governments are well-meaning and hard-working, but they do not understand service industry cash flow, job creation, consumer behavior, lease costs, and the rest of it. And, perhaps more damaging: they don't understand that a trade can be a career. 

Allow me to explain.

The other day, one of my barbers was told by an office worker that, now that the barbershop is closed down for the foreseeable future, he should just get a job bagging groceries instead. To her, one job that does not require a college education is the exact same as another job that does not require a college education. Delete barbershop, insert grocery store. It's the same thing to her. What this fails to acknowledge is that, for many of us, hairdressing is a career. Of course this barber, just like the rest of us, is in dire straits without his income, and maybe some of that financial pressure could be alleviated with another, temporary job. But he's more depressed about the loss of a career he chose, a trade he's perfected, and a place of community he's grown to love. 

As I watch our government flounder to respond to the economic devastation of this pandemic, I get this same sense of disconnect between the rarified halls of power and us average folks in the real world.

For example, high revolving cash flow businesses (salons, restaurants, and the like) will have a very difficult time benefitting from the forgiveness aspect of the new Paycheck Protection Program due to the way it's tied to maintaining full payrolls. It also seems to assume life will go back to normal after June. Most of our industry has already shut down, and we have no firm end date in sight. We have no payrolls anymore. And even if we can  hire everyone back and re-open on June 30, will consumers be crowding the streets to spend money by July 1? Of course not. But our lawmakers do not understand this, because they've never been in the position the service industry is in right now. And, though they may never say this out loud, to them our jobs don't carry much value. Not like, say, engineers working at Google. 

The other day

I saw a poignant post on social media that said, "If the virus doesn't kill me, hunger will." That kicked me in the gut. The absolute minimum that the government should provide is the environment in which you have the opportunity to provide for your family. At this moment, we've been stripped of that right. For me personally, I won't be allowed back to work in Virginia until June 10 at the earliest. 

State and local governments are perfectly comfortable dictating the closures of their entire service industry economies and waiting for the federal government to come in on the backend with financial emergency help. But what if the federal government can't get that done in a way that works? And, from a basic government level, is that even okay? Can a city decide to shut us down, with no help for businesses on their payroll, leases, utilities, and other obligations? Basically, can they take away our jobs overnight?

It seems so. 

If I sound disillusioned with all levels of our government, it's because I am. It's become clear to me that we must be prepared to save ourselves the moment our local governments allow us back to work.

How can we do that?

First off: there are no good choices right now. It's about making the best of the bad choices. Your one and only job, as the owner of the business, is to get the business in the best possible spot to have an opportunity to reopen for your people. Taking government loans could be the help you need to allow you to make it through this, if you determine you qualify and that's a viable option for you. However, beware of going into more debt to keep a business afloat for nothing more than ego. Think twice about loans that will have you working for the government for three to five years without income or, worse, going out of business anyway at the other side of this due to overly burdensome monthly payback requirements. Do your numbers and do them again. Make sure that the best option isn't simply closing and rebuilding later. 

You also have to think through whether it's advisable to generate any income during this shut-down and, if so, think through thoroughly how best to do it. You will owe taxes on what you sell, and the government will collect those taxes wether you go out of business or not. Meaning, the funds you collect through at-home color kits and gift card purchases will be taxed. Furthermore, those gift cards will need to be honored. What happens if you open back up on July 1 and half of your first two weeks of business is paid for with gift cards? You still won't have enough revenue to keep the already wobbling ship afloat. I also know some owners are having to use gift card proceeds to pay rent to keep their spaces. I have no judgment on this — you have to do what you have to do, and this is an impossible time for us all. But that's one of the reasons I have not wanted to do gift cards during this shut-down: I'm terrified of going out of business. What happens to the gift cards then? You will either have to find the money to pay back those wonderful customers who tried to support you with a gift card, or skate with their money without ever being able to provide the service they already paid for. The latter is something you likely don't want to carry on your conscience for the rest of your life — not to mention it would destroy your ability to ever work in the same community with any dignity. Please think through all of these aspects ahead of time and, if at-home kits and gift cards still make sense for you, then go for it. 

Speaking of rent,

landlords are also going to be in a bad place on the other end of this. I've reached out to my landlords and half of them are not quite grasping the magnitude of the situation yet, but they will. The real estate industry as a whole works on a model of being leveraged to the gills, so they will not want to lose many paying tenants because they might be looking at years before those spaces will be filled again — and that puts their businesses at risk as well. I will give it until the end of April when they don't get paid for a second month in a row before it really starts to sink in. Because if we lose, they lose.

Do not feel disempowered in your conversations with your landlord. If you go out of business, they will have to find a new tenant in what may be the worst economy of our lifetimes. And it's guaranteed they won't be able to get the same level of rent for your space as they got from you before all this. They have every interest in working with you. 

Besides the tax implications,

there is a unique issue to think through with at-home color kits, and that's supply chain stability. When we come back, our color supply chain might not be as stable as it was, due to a lot of the manufacturers shutting down to help make soap, hand sanitizer, and other necessities to help fight Coronavirus. Make sure you have enough color and supplies to last you at least a month after you open back up. Now is the time to run through each and every scenario. Remember that product companies are also disrupted businesses and their models are in just as much peril as ours. They look like big behemoths but they just don't have the reserves to save all of us and themselves. 

Finally: staff.

Do you know if all of your staff is coming back? I've already had several stylists tell me that they're planning on going independent on the other side of this. Others have temporarily moved back home to faraway states to be with their families through this crisis, and I don't know if they'll want to leave home again at the end of this. So even if I can reopen, I will have to hope there are enough people at the end of this that it would even make the business viable again. Hard decisions ahead for things I've spent the better part of two decades fighting for. 

What does the other side even look like? If you're like me, you've spent some of your time in quarantine rocking back and forth on your bed with the covers drawn over your head contemplating that very question. If we are to endure, we have to prepare for the worst and hope for the best. We are probably coming back to the worst economy of our lifetimes. People will be scared to leave the house and our industry isn't one to easily keep social distancing standards. Stylists will be scared to come in. It is almost unavoidable that most of us will contract Coronavirus, given how many people we interact with daily. But, according to one of the main companies working on a vaccine, a vaccine may be here in early 2021. In the meantime, others are working on antibody tests and of course drugs to treat people who fall ill. When any of these medical miracles happen, we will bounce back in a big way. There is just so much preparation to be done between now and then, and fear won't save you. Think about steps to survive and also about what you want your salon or barbershop to function like on the other side of this. Maybe a model that you don't know or necessarily care for might actually be your best option when we return. As always, others can only educate you, but only you can choose the right path for your business and your people.

Is it going to be a rocky road ahead?

Yes.

If this was easy, everyone would be a business owner. Remember to chip away one problem at a time. Arm yourself with the best possible data and tackle solutions based on facts, never based on panic or ego. And you know what? Some of us may fail. Our businesses may not arrive at the other side looking exactly the way they did before. Some of them may not arrive at all. If that happens, just remember the advice from 20-something-year-old punk me: So what if it fails? Your talent can't be taken away from you. If we need to, we'll build it again.