Business leaders report unprecedented measures, innovative ideas and a hyper-focus on the bottom line as the novel coronavirus --- COVID-19 --- wrecks havoc on all things commerce from corner to corner of the Valley of the Sun.
Arizona’s economy thrives on tourism, business leaders explain. The service industry --- places like hotels, restaurants and retail space --- is the No. 1 engine to the economic machine of the state and with almost standstill activity most businesses don’t have long.
While business leaders admit tough times are here to stay, and no real answers are anywhere to be found, a collection of surveys conducted by both the East Valley Chambers of Commerce Alliance and the Greater Phoenix Chamber of Commerce offer insights into current state of affairs.
Combined, the two organizations have memberships spanning the metropolitan area with about 700 businesses participating in the survey efforts.
As COVID-19 emerged, chamber leaders began to seek understanding from its membership.
“I think, first of all, a number of small and large businesses responded and we found that 60% of companies haven’t taken action just yet in terms of salaries and employees,” said Todd Sanders, president and CEO of the Greater Phoenix Chamber of Commerce, on early results of a membership-wide business survey.
The Phoenix chamber, the week of March 16, sent out a business survey to gauge economic impact.
The survey yielded 187 responses of which 83% were companies of 100 employees or less and 68% of those respondents say COVID-19 is and will have a semi- to dramatic-negative impact on operations. Meanwhile, 30% reported it is already having a detrimental effect.
“Companies are working to make sure they are working toward being protective and safe and they are also working toward making sure employees and employee families are safe,” Mr. Sanders said of initial reactions to the pandemic.
“As you saw from the responses, 35% at the time of the survey were very concerned about loans. What we are hearing subsequent to the SBA loans is they are good, but are able to get through to when those loans are available, if they are approved.”
Businesses surveyed by the Phoenix chamber say these items are of most importance:
Mr. Sanders reports everyday businesses are dealing with grim realities.
“What kind of bridge financing can we put in place to make sure business can get through until SBA loans are available?” he asked.
“That is going to be a really important factor to a lot of businesses out there. There are a number of cities and counties around the country looking to fund businesses to help them make it through that bridge time period. I think those topics are being discussed at the city and at the county level.”
Negative impacts will be hard to avoid, Mr. Sanders admits as numbers show 13% of respondents are anticipating lay-offs and some more drastic measures.
Numbers show, in response to whether businesses have had to lay-off employees or reduce salaries:
“We are trying to take employees who have been put on furlough, and give them opportunity to find employment in the grocer business or somewhere in logistics,” he said. “Employees laid-off from the school districts --- they have finger printing already done. We can take those certifications and place them temporarily in places to help them solve their employment problem.”
Ms. Sanders says what has been encouraging during uncertain economic times is the power of community.
“I will tell you, what has been important and heartwarming working through this are business owners not just thinking about the bottom line, but more focused on what they can do to help,” he said. “I think when the dust settles, no one will have wished for this to have happened. A crisis really does expose where your strengths and vulnerabilities are. I think that is probably true for all businesses.”
Scottsdale Chamber of Commerce President & CEO Mark Stanton says chamber leaders from all over the Valley are communicating with each other to help support businesses in need.
“Businesses are looking for ways to navigate this and find ways to stay open and maintain revenue,” he said. “Ultimately they are looking for ways to hold on and it is outlined in the study, even though we are seeing it in real time --- businesses are look to get access to cash.”
Mr. Stanton says business owners and community leaders are all-in when it comes to getting through the national pandemic.
“They are hoping to get through on the shorter term for their employees and their families. How can they re-purpose the jobs of employees? How can they retool their service models?” he asked of daily consultations. “There is a groundswell of support and we are even feeling it here at the chamber. We are seeing new members who are joining the chamber or who are re-signing up with us.”
--- Mark Stanton
Of the more than 5,000 chamber members surveyed through the EVCCA, 485 members provided detailed responses on numerous questions regarding general operations.
The EVCCA is comprised of seven East Valley chambers of commerce within the communities of Carefree and Cave Creek, Gilbert, Mesa, Queen Creek, Scottsdale, the superstition region and Tempe.
EVCCA officials report a commonality of respondents emerged:
Queen Creek Chamber of Commerce President Chris Clark contends proprietors in the far East Valley are weathering the storm today, but as days go on, worries mount, he says.
“So far, folks are holding on pretty good, but are getting more nervous the longer it goes on, of course,” he said.
“How do you plan? Is this a week-long thing, a month-long or longer? That really changes how small and major businesses are going to address it. There is a lot of concern.”
Mr. Clark says the fluid nature of the news surrounding the virus and the appropriate responses varying from state to state makes it hard to predict future business operations.
“Really, it is developing even as we speak. That is one of the things that is so fluid --- there is lot of concern that has been expressed about the new requirements of FMLA for example,” he said. “Scenarios are you get that money pack from payroll taxes, but how do I hold on to even make payroll?”
--- Chris Clark
Within the EVCCA data are some stark realities including one example of a business seeing cash flow go from $43,000 to just $89 in one week’s time comparing year-to-date data.
“The immediate and the now, what can we do now to shore-up business now?” asked Mr. Stanton. “But we are seeing businesses thinking about the other side of this. The survey is an important reality check as the number of people who participate tells us the level of concern there is in the community.”
For Cherí Valentino, vice president at the Scottsdale Area Chamber of Commerce, all aspects of business have changed and will change, she says.
“From the chamber side, we are seeing from our members that they want the connectivity we provide and we are looking for ways to maintain that,” she said. “We are putting in place avenues to do that --- either it be webinars and looking at our business models and how well we can do that from the web, for example. All of our events, we don’t anticipate that going away at all. We are going to keep doing them, but in the short-term, we are not.”
But when there is a will there is a way, Ms. Valentino says.
“I think webinars and the virtual space are something new to our community and to our society as a whole,” she said. “I think many takeaways I have from the survey can be positive. Looking at the results, as Mark said, we are not seeing businesses going under at the current time.”
Mr. Stanton says business will find a way to make it work.
“We have our first virtual leads group tomorrow morning --- they are looking for the chamber to host those things and continue to bring them that service,” he said. “If you can’t go to a breakfast meeting and you can’t meet a friend for lunch, how nice we already have those mechanisms there to meet virtually.”
While Mr. Clark admits the hospitality sector in Arizona --- a keystone of the statewide economy --- is being decimated, he reports local proprietors are still pushing forward.
“I was impressed by how some people I think indicated that the virus is real, but this shutdown is not slowing them down,” he said. “They are still saying that they will come back.”