The clock at the center of Boston University’s campus keeps ticking. But for many small businesses, including the clock’s creator, time waits for no one.
Clockmaker Thomas Erb’s work spans nearly 40 years and includes the iconic clock on Commonwealth Avenue. But now, in the midst of a global pandemic, Erb’s small business is facing unprecedented challenges.
“The world is very quiet, has been for a couple of weeks now,” Erb said. “But hopefully, we do have enough work to keep busy.”
Christopher Carlozzi, Massachusetts state director of the National Federation of Independent Businesses, said the economic toll the shutdown is taking on small businesses is near crippling.
“Businesses are devastated right now. You are seeing an unprecedented level of fear and anxiety amongst business owners,” Carlozzi said. “It’s having a significant impact on the way Boston does business.”
Currently, the Department of Labor reports about 300,000 residents are unemployed in Massachusetts — a nearly 200 percent increase from the state’s norm.
Carlozzi said the NFIN, the largest small business association in the United States, emphasizes the importance of small businesses to the economy.
“Small businesses provide the vast majority of jobs in America and in Massachusetts,” Carlozzi said. “So once we do get to the point of recovery, the state is going to look to small businesses to once again create those jobs.”
Despite the pressure under current circumstances, many small businesses have stayed afloat by adapting to the changing times, Carlozi said.
“We’ve seen businesses that had sit-down restaurants have to adapt to takeout,” Carlozi said. “You saw manufacturers who may have made certain products change what they were making in order to meet demand now.”
But not every business has the wherewithal and resources to change, Carlozzi said. Some small businesses have had to permanently shut their doors amid the ongoing crisis.
“I hear from business owners who have been in operation for generations, people who’ve never had to do layoffs, and now they’re put in a very difficult decision where they’ve had to reduce their workforce,” Carlozi said. “Many of them may not even be an operation at this point.”
Ivan Petkov, assistant economics professor at Northeastern University, wrote in an email that many small businesses are having to downsize because most depend directly on their profits to pay employees.
“They have no capacity to sustain employment when they are closed or when there is no demand for [their] products,” Petkov wrote.
The Paycheck Protection Program, a federal funding project for the distribution of loans to small businesses, has provided some relief.
Yet, Carlozzi said, many applicants did not receive their share of financial assistance because the PPP quickly ran dry after an “almost disastrous” rollout.
“A lot of businesses who did the right thing, who filled out the application, who had everything processed and went through the banks,” Carlozzi said, “found out they didn’t get that money that was supposed to keep them afloat for the next couple of weeks.”
Erb’s clock-making business, Electric Time Company, was among those businesses that received zero PPP funds.
Erb said he filled out much time-consuming paperwork to put together the application, recruiting lawyers to aid in the process. This procedure, he said, puts smaller businesses at a disadvantage compared to larger chains.
“If you’re a Shake Shack, you probably have 15 people working on this stuff,” Erb said. “But when you get all the way down, especially smaller firms, it’s not going to work for them.”
Erb said he feels as if businesses receive loans based on their luck of the draw. Some small companies were fortunate, but many were not.
“It’s a bit of a lottery, Erb said. “If my competitor gets it [and I don’t], it puts me at a disadvantage too, which doesn’t seem really fair. Or vice versa too.”
The U.S. Senate approved on Tuesday another $310 billion in funding for PPP, and small businesses like Erb’s remain hopeful that they will secure a portion of it this time.
“My bank seems to think that we’ll probably get through this batch. At least, I hope so,” Erb said. “If we get the funds, it’ll give us the ability to open up 100 percent with our staff, which would be great.”
But even once it is safe to open up the economy again, Carlozzi said the country will see a new normal. Still, he said small businesses will be the impetus for growth once the pandemic is over.
“We want to make sure that we have thriving main streets in Massachusetts, that those downtowns are vibrant again and that people are shopping and dining in our communities,” Carlozzi said. “And it’s going to be small businesses that have to create those jobs.”
The transition will be tough for all affected, according to Petkov.
“The economy will likely slowly reopen by the beginning of the fall,” Petkov wrote. “Even as the economy reopens, it will be very far from full capacity — more in line with a recession.”
Despite the ambiguity of the future, Erb said his company maintains an optimism for what’s to come.
“I don’t know the looking glass of what the world is going to look like,” Erb said. “[But] I am confident that we’re going to recover.”
