With help from the Paycheck Protection Program, Desert Footwear owner Thomas Corrington kept his doors open – here’s how he’s made it work.
Opening a new business is no small undertaking under normal circumstances — there is always risk at the start of a new business endeavor, especially financially. But when COVID-19 became part of our reality in early 2020, those challenges escalated even further.
Thomas Corrington, owner of a small business called Desert Footwear, which operates as a licensed dealer for Red Wing Shoes, opened a second location just one year ago. Instead of building momentum and making sales, operations at both of his locations suddenly came to a halt. However, by making a few adjustments to his business model and receiving help from the Small Business Administration (SBA) Paycheck Protection Program (PPP), Thomas was able to land on his feet. Here’s what he did to make it happen, along with his advice for others in his situation.
Adjusting to COVID-19
When COVID-19 started to spread, many non-essential businesses were required to close to help prevent the spread of the virus. Desert Footwear provides safety footwear to essential workers who are out working on roads, fixing traffic signals, maintaining fire safety systems, and generally "building our world". Thomas hoped this would designate his business as essential. Unfortunately, the state didn’t recognize the business as such, and the stores had to close.
“Immediately we went from our normal business flow to zero — obviously a huge shock,” explains Thomas. “Initially they would only allow us to open for telephone orders with deliveries. When you’re in the shoe business, that just doesn’t work.”
With these limitations, sales were down 90 to 95 percent compared to the year before. “There was a lot of adjustment involved at first, because of having to adapt quickly and with no notice to a different way of doing business,” says Thomas.
Despite the initial transition, Desert Footwear managed to continue selling shoes. Once curbside pick-up became an option, the store was able to increase sales to about 20 percent of what they normally sold. And then when the stores were able to open their doors at partial capacity while providing hand sanitizer, gloves and practicing social distancing, business began to improve. “We were allowed to open the doors with 50% of our fire department defined capacity for our retail locations. We actually went a little more conservative within that – we’re at about 35% of our designated capacity,” Thomas explains.
“One of the things that I did was to literally sit down with my checking statements and go through line by line and examine every single expense in terms of what cutbacks could be made.”
The role of the Paycheck Protection Program
While Thomas was gradually able to open doors to maintain some customer sales, the Paycheck Protection Program (PPP) allowed him to cover essential expenses. “We were excited when we got the opportunity to apply for the Paycheck Protection Program (PPP) through U.S. Bank,” he says.
Once his application was approved, Thomas was able to fund employee payroll, including his and his wife’s. At the beginning of the pandemic, he was forced to furlough his store’s employees. “They were off for probably two months, by the time all was said and done and we got back to where we could open up a little bit. But we were able to bring everybody back and keep the business going, in part because of this program.”
Now that he’s been able to cover his basic operational costs, Thomas plans to move ahead with his goal of opening a third location for Desert Footwear within the next six months to a year. “We'll be able to continue on that path, albeit delayed,” he says.
Tips for small business owners
In addition to the service adjustments and Paycheck Protection Program, over the last few months Thomas has made smart financial choices, cutting back on costs wherever possible. For other small business owners searching for solutions right now, he recommends reviewing every single expense with a highly critical eye to determine whether it’s truly necessary.
“One of the things that I did was to literally sit down with my checking statements and go through line by line and examine every single expense in terms of what cutbacks could be made. We basically took a fine-tooth comb to all of our expenses,” says Thomas.
A few ideas to consider that may help cut expenses and increase your visibility
Negotiate rent. Thomas contacted his landlords right away to explain his situation and they were able to work out an agreement for reduced rent at his original shoe store location. If you’re struggling with sales and expenses, discuss whether an arrangement with reduced monthly rent is a possibility.
Reduce utility costs. “By taking a really close look at all of our expenses, we were able to identify as many as we could that we were able to eliminate or reduce so that we could ensure our survival,” says Thomas. “Trying to squeeze some extra revenue and reduce some extra expenses is the best advice I could give other business owners.” These expenses may include common area maintenance fees, like trash pick-up and landscaping, or even your background music company fee, which was put on hold for three months.
Increase social media presence. To keep your business on customers’ radar, be sure to take advantage of social media platforms as a low cost way to keep clientele up to date with what’s happening at your company. For Thomas, this was a helpful way to stay in touch with customers when their funds were limited. “We increased our social media presence so we could stay in front of our customers during a time when our marketing budget was really stretched,” he says.
Thanks to the Paycheck Protection Program, Thomas was able to regain solid footing for his two shoe stores and is moving forward with his plans to open a third location in the near future. He is especially appreciative of his local U.S. Bank branch manager, Adrienne Carrillo, who was able to offer continual support throughout the process. “She's been extremely supportive,” says Thomas. “We’ll be able to continue to pursue our long-range goals. The short-range has been secured.”
Continue reading more stories about how small business owners navigated unprecedented times.
Check out additional tips for funding your business operations.