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Brooklyn Chamber of Commerce survey paints devastating picture of small business struggles – Crain's New York Business

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A devastating mix of job losses, revenue declines and rent delinquencies are plaguing small-business owners in Brooklyn, according to a year-end survey conducted by the borough’s Chamber of Commerce.

Roughly 80% of small businesses questioned indicated a year-over-year decline in revenue, while 85% of the businesses said they laid off workers last year.

“This is right now the hardest thing ever,” said Elaine Greene, owner of Greene & Greene Uniforms in Crown Heights since 2015. “As I’ve gone back into my store, I don’t get any kind of customers.”

Nearly half of those who lost revenue said their business declined by more than 50% between 2019 and last year. Only 15% said they added employees in the same time frame.

“Clearly businesses are just barely hanging on,” said Randy Peers, president and CEO of the Brooklyn Chamber of Commerce. “And we surveyed those that are still in businesses. It’s not a commentary on those that have permanently closed.”

There were 60,000 small businesses in the borough before March, and 84% of them had fewer than 10 employees.

The Chamber of Commerce surveyed 166 small businesses across multiple sectors. Roughly half of the businesses were located in the Downtown Brooklyn area, and 51% of the total were minority- or woman-owned enterprises.  

To weather the economic storm, small businesses changed their business model, innovated, contracted or employed a blend of measures to make a profit. Almost 60% reduced their hours; 33% made technology upgrades; 23% converted to e-commerce; 21% launched curbside pickups; and 11% built an outdoor facility.

Greene’s uniform store pivoted from selling church and clergy regalia to selling hospital scrubs purchased through a federal Small Business Administration Economic Injury Disaster Loan. But the inventory switch has not brought in more customers, she said.

“The whole month of February, I have not got any business at all,” she said. “And I go to the store every day. It’s so discouraging, and it’s depressing, and I’m not sure what I’ll do.”

She said she’s hoping things will pick up once she uses MWBE state and city certification to gain government contracts from the Department of Education to sell uniforms for children returning to public schools this year.

“I’m waiting for that to be approved,” she said. “I’m just still praying. I’m not giving up yet.”

One-third of all businesses surveyed said they owe some form of back rent. Only 2% said they were able to restructure or renegotiate their lease. On the other hand, 40% of businesses got a rent reduction or had their rent deferred. Almost half received no concession at all—which has led to closings and shutdowns.  

Mitchell Szpicek has owned the Little Things toy store in Park Slope for 13 years, though the store has been a neighborhood fixture since 1977. During the past year, two of the three store locations in Park Slope closed permanently. He estimates that he lost $500,000 in revenue last year and that he owes $200,000 in loan payments to the government.

“We only have one store left,” Szpicek said. “We still don’t know where we’ll be tomorrow.”

Federal assistance played a big role in helping Brooklyn small businesses such as Little Things survive.

“Before we got the government loans, we were close to going under,” Szpicek said.

Roughly 75% of businesses surveyed received a federal Paycheck Protection Program loan, while 53% received EIDL assistance.

The Chamber of Commerce survey results demonstrate that the status quo for small businesses in New York is not sustainable.

“Ultimately we’ve got to reopen,” Peers said. “We need to urgently reopen more of our economy and access much more federal support if our small businesses are to survive in 2021.

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