As the person behind the marketing of a small brand, I typically have a strategy that I like to think of as, “appear bigger than the bear.” As a tiny brand hustling to compete with some very large brands, we aim to appear larger than we are. My theory is that if we want to be competitive, we need to look like a worthy competitor. You know, if you need to scare off a bear, you should try to look bigger than the bear. The current situation has led me to take pause and give up the ruse. Sometimes there’s more to the story than super sexy photos of bikes. I don’t know about anyone else out there, but I am getting lonely here in my home office. I miss my co-workers. I miss shooting hoops in the warehouse in the afternoon and walking to get a slice of pizza, making awkward small talk in the pizza shop.
We are all yearning for our friends and our families and our old normal. In these times of the COVID-19 pandemic, to date, globally nearly 400,000 lives have been lost to the coronavirus. Here in the United States 21 million people are currently unemployed, some of our favorite restaurants and bars are closing forever, and we don’t know if or when we’ll get back to the way things used to be. Small businesses everywhere are struggling harder than ever to survive. I work for Portland Design Works (PDW) a cycling accessories brand based in Portland, Oregon. We are a small business, and like so many others, we almost didn’t make it through these unprecedented times.
When the COVID-19 pandemic caused safer at home orders to take effect in Oregon on March 17th I was fortunate enough to begin working from home. The office/warehouse became a one person operation with Erik and Chris trading off mornings and afternoons answering phones and shipping orders. Erik is the co-founder and general manager of PDW and Chris is the warehouse and customer service coordinator. Currently PDW has only three full-time employees. Our sales manager, Matt, was on paternity leave with his new baby, Wes, when the pandemic hit. Yes, you read that right, PDW offers paternity leave. Matt extended his leave so he could take care of his new baby and little girl while his wife, Lara, an RN working bedside in the medical ICU, got more directly involved with the pandemic fight. Our lead designer, Lars, works part-time on PDW projects from his home up in Spokane, so his work life wasn’t affected too much. That’s it, that is all of us here at Portland Design Works.
Our small business is highly dependent on the success of a lot of other small businesses. When the pandemic began shuttering the nation, bike shops across the country were scrambling to adapt. My career in the bike industry started at a beloved local bike shop in NYC, and my experience there shaped me into who I am today. The thought of all the small bike shops struggling wasn’t just concerning from a business standpoint, it was personal. Helping connect customers to those shops was the motivation behind the COVID-19 Bike Shop Map that we created with Chris King. In late March/early April implementing that map was a huge focus for me. I was obsessively checking the signups and adding the new information to the map. Watching the blue pins that represent bike shops flood the map made me feel like I was actually doing something to help small businesses get through this. Seeing a visual representation of this vast network of shops keeping folks in their communities moving by bike also gave me a comforting sense of unity at a chaotic time.
While I was focused on getting the word out about the COVID-19 Bike Shop Map, Erik was in the trenches trying to figure out how he was going to keep us afloat through all of the cancelled orders and future uncertainty. Erik and I normally share an office above the warehouse but with me at home and him there, I had no idea what he was going through on his end. We were having weekly Zoom meetings and I had challenged the guys to a beard contest. As Erik looked rougher and rougher each week I chalked it up to him being a beard champion, not him being a highly stressed small business owner. Aside from the increasingly disheveled appearance of my boss, things on my end were looking optimistic under the circumstances. I had a lot of confidence that PDW was going stronger than ever. It turns out that wasn’t the case. On the morning of Friday April 10th, Erik notified Chris and I that we were furloughed indefinitely.
Indefinitely is one of those measures of time that is extremely anxiety inducing. After a surreal and uncertain week of jogging around my neighborhood, navigating unemployment for the first time, and lounging on the porch with my pup, I was suddenly back to work. PDW ended up among the group of extremely lucky businesses who were approved for a PPP loan during the first round. Our layoff only lasted one week. Just before Chris and I were welcomed back to our positions at PDW we were chatting over the news that the money had run out, the well was dry. We were both fairly certain that this was going to be the long kind of indefinitely. I am very grateful that it turned out to be the short kind. So, with all the doom and gloom I was reading in the news about the failure of the PPP loan program, how did we manage to secure one? How did PDW get our loan approved? I know there are so many other small businesses out there struggling right now, so it seemed really important to ask Erik – how did you keep us afloat?
What was the PPP loan process like?
Erik Olson:
It was wild. The Treasury said the PPP loan program was going to go live on Friday, April 3rd so I started getting after our bank that week to get a sense of what I could do for document preparation. The problem is that the bank was just as in the dark as we were because the SBA, who is administering the program, hadn’t released those details. So I knew we were going to be competing with literally a million other businesses for the program funds but any preparation I could do at that point was purely speculative. The SBA had an “application” on their website but it was the equivalent of writing down your company name and a dollar amount on the back of a napkin and handing it to them. No way a bank was going to approve a loan with just that application and no supporting documents.
So I just started compiling and organizing everything I could think of into folders so I could quickly grab whatever it turned out we needed for the application. Payroll tax reports, IRS forms, state and local tax filings, personal financial statement, balance sheet, health insurance premium receipts, rent invoices, articles of incorporation, operating agreement, proof of identity, etc etc.
Thursday, April 2nd at around 10pm Pacific the SBA released more details to banks on how the program would work and told banks to start accepting, vetting and submitting applications to the SBA the very next day. Our bank wasn’t able to accept a single application that Friday, as they had to build out an entire system to be able to accept and process thousands of loans and it just isn’t possible to do that in 12 to 24 hours. It would turn out that the bank didn’t accept any applications until Thursday, April 9th!
Meanwhile, I’m watching Steve Mnuchin and the President talk about how smoothly the program is going and all of these loans are being approved and money is being dispersed. I talked to a dozen other business owners and none of them had been able to submit applications either. I was getting really worried. To compound that stress, there were no nitty gritty details on what the process of loan forgiveness would look like or exactly what would or wouldn’t qualify. If we did some small thing wrong would just a portion of the loan be unforgivable or would that mean the whole thing would be unforgivable? How could we play by the rules if they hadn’t been written yet (the SBA finally released some guidance on how the loans will be forgiven on May 18th.)
I got so worried that I started calling up the offices of our senators and our congressman, as well as reaching out to friends with political contacts. What I heard wasn’t very promising. They didn’t have any answers on how loan forgiveness would work and they also hadn’t heard of a single business in Oregon getting money at that point (this was Wednesday, April 8th). I asked one of the congressional staffers how I could accept a loan that was “possibly forgivable” if they didn’t have rules set for how it would be forgiven. They told me that it’s a loan, so if it ended up not being forgivable then I could just give it back. They didn’t seem to understand that the whole point of the program is to pay employees their salaries and benefits. That money would be gone. There would be no money to give back. It was not confidence-inspiring.
By the evening of Thursday, April 9th stories were coming out in the press about what a disaster administering the program had been. The New York Times article “Small Businesses Wait for cash as Disaster Loan Program Unravels” really hit me hard. I came to the decision that we needed to operate on the assumption that no help was coming from the government and we would just need to survive this on our own. I ran our numbers for the millionth time on Thursday night (which was my birthday, coincidentally) and realized I needed to furlough everyone before we got into too deep of a hole on losses. My plan was to call folks up Friday morning with the bad news but I kept breaking down in tears every time I ran it through in my head, so I had to send emails to get it all out.
Long story short, I was able to get our application accepted and approved by the bank on April 9th. They immediately uploaded it to SBA who in turn approved it on Monday, which was the same day the PPP loan money ran out completely. I didn’t want to count any chickens before they hatched so I waited until the money was actually dispersed to our account that Friday to tell the PDW team the good news and invite them back to work.
Their guidelines on loan forgiveness are still a bit vague, so we don’t know exactly what portion of the loan will ultimately be forgiven, but I’m just being extra conservative on record keeping and hoping for the best.
During the week the staff at PDW were furloughed, you were still keeping things at PDW moving, so what was your day to day like?
Erik Olson:
I was really stressed out so I kept waking up at 5 or 5:30am. That sorta worked out because I could start working early on processing orders and responding to emails from suppliers and customers before going into the office to pack and ship orders. The weird thing about our business during that time was that all of our large customers stopped ordering entirely but direct to consumer orders for a water bottle cage here or a light there were going crazy. So even though business was way down it was a ton of work sending out all of those little orders. My wife was kind enough to come in on Sundays and help me get a head start on packing up orders that were coming in over the weekend. When I wasn’t packing orders there was bookkeeping, voicemails, forecasting, customer emails, product development, chasing down the PPP loan, paying bills… all of the nuts and bolts business stuff.
Why did you decide to fight for PDW and not throw in the towel?
Erik Olson:
If you’re going to throw up your hands and walk away every time there’s a big setback you’ll never make it. When I got my first job in the bike industry (aside from bike shops) working for Planet Bike in ’02 or ’03, they had just experienced a big flood and lost half their inventory. The way the owner told the story, their graphic designer literally rolled up his sleeves, said “Well, let’s get to it” and proceeded to start opening waterlogged boxes to unpack products and try to dry them out and save what could be saved. That’s the only attitude you can have if you want to stick around as a company. Take a minute to curse the situation and then move past it. Lift your chin up and say “We got this.”
Now that business is back up and running, what’s that like? How are sales going?
Erik Olson:
Bike boom! The whole bike industry seems to be doing really well. Our large customers and distributors are still being conservative with their inventory so the sales at the consumer level haven’t completely filtered up to where we are seeing huge orders from those large customers but it is slowly building. The outlook is much, much better than just a few weeks ago when everything seemed to be frozen. Our operations are back to the “new normal.” One person in the office and one person in the warehouse at a time and a lot of working from home.
Advice to other small business owners struggling during the pandemic?
Erik Olson:
Talk to as many other small business owners as you can to get their perspective/advice and also just to not feel alone in the struggle. There are a lot of other people going through the same things and it’s comforting talking to someone in the same boat.
Get out in front of things as much as possible. In late March I emailed our suppliers about orders that are supposed to ship in June and July to let them know we may need to delay those orders due to decrease in demand. That way suppliers have time to work that into their plans and it is way more effective and respectful than trying to make changes last minute.
Try and improve cash flow by getting or extending payment terms. Sometimes all it takes is to ask a supplier for them to extend you another 15 or 30 days on payment terms.
To prepare for the next crisis, develop a relationship with your bank and try getting a line of credit when you DON’T need it. Banks like lending you money when you’re making money, so if you wait until a cash crunch or crisis it will be too late.
Finally, just put things in perspective. Focus on the good things. Take breaks. Ride your bike!