Running a successful business can be challenging under the best of circumstances. But for millions of business owners across South Dakota and the country, the last few months have seen that challenge rise to unprecedented levels, forcing many to shut their doors in light of the COVID-19 pandemic.
Now a national survey by the United States Chamber of Commerce and MetLife is saying nearly eight out of 10 businesses nationwide are at least partially reopened, and business owners are starting to see a light at the end of the tunnel.
“We’re starting to see more and more open back up,” said Natalie Muruato, executive director of the Lake Francis Case Development Corporation in Chamberlain. “A lot of businesses have taken advantage by remodeling or introducing a new model line. Some businesses are only open part-time, or doing things a little safer and reducing the amount of people they allow in.”
The community of about 2,300 on Interstate 90 west of Mitchell reacted in a similar manner to other communities in the state when the spread of COVID-19 became a serious concern. Restrictions on the number of people who could be in one place at a time meant traditional gathering spots like restaurants and movie theaters had to change their methods of operation.
The national survey indicates that 55% of business owners feel it will take six months or more to make a full recovery from the pandemic disruption, a figure that was up from 50% last month and 46% two months ago. Muruato said while it was difficult to pinpoint when business would return fully to normal, the signs of recovery are more apparent all the time.
While the Chamberlain business community is being necessarily cautious as it reopens, the community does have some advantages. Like many other South Dakota communities, it has a relatively small population and is known for its outdoor activities, be it hunting, fishing or other events. Those activities help drive the local economy by drawing people from around the state, she said.
“I think people are just grateful that we’re getting back open. We’re still holding our July 4 parade and events, and still encouraging people to come fishing,” Muruato said. “And more and more businesses are opening more or finding ways to keep their customers and employees safe.”
Jeff Buechler, president of the Freeman Community Development Corporation, agreed that most businesses in the town of 1,300 have reopened, and those that didn’t have to close are slowly seeing things return to normal.
“I don’t think there are many businesses that aren’t operating at some level. Most of the independent type contractors are all working and hair salons are all operating at some level,” Buechler said. “I would say 80% would be on the low side (of businesses operating at some capacity).”
There are areas of the economy that are slower to reopen to full capacity based on the nature of their business. Buechler noted that some professional businesses, such as the dentist office and optometrist office, are seeing patients on a limited basis due to the close nature with which the doctors have to work with their patients. CorTrust Bank, where Buechler serves as branch manager, just recently opened its lobby doors to the public after encouraging customers to conduct business online, by drive-up window or by phone.
“A couple of weeks ago we opened up our front door to street traffic, but even with that we’re being cautious with issues, and people seem to be respectful of that,” Buechler said.
Buechler said one factor in the recovery of the Freeman business community has been the tendency for residents to support local businesses. That has usually been true in the past, and it was even more so as leaving home and travel was discouraged by public and health officials.
“One thing we hope to see is people continuing to shop at home. I think there’s been a real improvement in people utilizing their local grocery stores, pharmacies and all those types of businesses and not feeling the need to run to a box store somewhere when you can get the same products here,” Buechler said. “And a lot of times for not any more money.”
Like some other communities around the state, the city of Freeman imposed limitations on how many people could gather in one place at a time and required restaurants to close dining rooms and move to a carry-out or delivery format. Local convenience stores removed their public seating to discourage social gatherings.
But life is returning to those parts of the community, Buechler said. Dining rooms have reopened, bars are tending to their customers and the swimming pool is scheduled to open for the summer this weekend.
Buechler said that the six-month estimate on the business community recovering could be true for some types of business, however. He used the medical clinics again as an example of an industry that will likely proceed with an abundance of caution, as may those who patronize them.
“I think in some of the especially face-to-face type hands-on relationships at a dentist office or optometrist or even the clinic, some people will put off some of those treatments until they feel a little more comfortable. I think some of those places will see a little bit longer of an effect,” Buechler said. “I don’t think the grocery stores ever felt it because people continued to shop. Hardware stores and the construction field continue to move along, but some of that personal service and more elective type of businesses will feel an impact for a long time.”
The survey indicates that a slight majority of small businesses that have shed workers anticipate rehiring most employees within the next six months. More small businesses report having fewer employees than more at 22% to 6%, but 71% say they have the same number of employees as in February of this year before the COVID-19 pandemic began in the United States. Among those that report having fewer employees now, 55% anticipate rehiring or bringing back most at some point in the next six months.
For Freeman, Buechler said that employers haven’t had to let workers go at a high rate, and employees, for the most part, are still coming into work despite the circumstances. Eighty-three percent of businesses that have not permanently closed report that they are making or planning to make adaptations in response to the coronavirus. Of the businesses making the adaptations, 48% have either started or plan to start more frequent cleaning or disinfecting of surfaces, while 44% are asking, or plan to ask, employees to monitor for symptoms and stay at home if they are feeling sick, according to the national survey.
“They feel like everybody is being cautious and with the county only having (six) known cases, it makes them feel more comfortable coming and going from work,” Buechler said.
David Lambert, director of regional development for the Mitchell Area Development Corporation, said most businesses in communities around Mitchell are up and running.
“I would venture to say most businesses are open at some level,” said Lambert, oversees a six-county region for the MADC. “But the closures in smaller communities doesn’t take on the same flavor.”
He noted that many small businesses in small towns never really fully shut down. Where they were able, they often modified their business model to allow for social distancing and enhanced cleaning procedures. And in other areas, such as the agriculture industry, it was as close to business as usual as could be managed.
“A lot of manufacturers are ag-based, and honestly they haven’t slowed down a bit,” Lambert said.
At the same time, the stresses of the farm economy are adding extra weight to an already uncertain time. While farmers are making their way into the fields, implement dealers are repairing equipment and seed dealerships are filling orders. But low commodity prices are making the business climate more unclear than if the industry were just dealing with COVID-19.
“Because now the ag economy is constrained with the low grain prices and livestock prices, some of those folks are starting to do some cost cutting measures and reduction in possible work hours,” Lambert said. “Staffing has become a critical issue.”
While some see the six-month timeline for recovery as possible, Lambert expects it will take longer for the overall economy to fully recover. Large event cancellations, such as Dakotafest not being held this year, can have an impact far beyond the few days the event is held. Besides packing hotels in Mitchell and drawing droves of people to the community, Dakotafest serves as a showcase for area ag manufacturers who rely on the event to get the word out about their products.
“That would be highly-optimistic,” Lambert said of the six month estimate on recovery. “The fact is the longer the concerns about COVID-19 continue, and things like the cancellation of Dakotafest continues, people are going to pull back. The ripple effect of that closing impacts every one of my small communities. Many of those manufacturers rely on that as one of their major marketing tools for their region.”
While COVID-19 continues to cast the shadow of an uncertain future over businesses in South Dakota, Lambert said the general positive attitude is still prevalent among business owners in the area. Adversity is nothing new to South Dakotans, as adaptability is one of the characteristics that makes the state resilient in times like these.
It won’t be easy, but business owners in South Dakota appear ready to tackle the challenge, he said.
“Most of the business people I’ve talked to have ridden out hard times before and believe good times will return if you watch your Ps and Qs and don’t overextend yourself,” Lambert said.