How four South Florida small businesses survived two years of COVID-19 and are growing again
First it was the virus, now small firms are dealing with new challenges like inflation and finding workers.
Internet sales drove Jamie Mardis' business during worst of the pandemic. Outdoor dining helped save Brian Parenteau's business when there wee restrictions to help slow the spread of the virus.
Rosanna Bermejo is going back to school while expanding her company. And Yesi Leon learned accounting software to help run her business.
Each of these owners used emergency government programs such as the Paycheck Protection Program and the Shuttered Venue Operators Grant to make up for lost business two years ago.
You turn to WLRN for reporting you can trust and stories that move our South Florida community forward. Your support makes it possible. Please donate now. Thank you.
Now, all four small business owners report business is booming as the COVID-19 pandemic enters its third year. Business restrictions are gone. Vaccines are available. And people are learning how to live with the virus.
This quartet of small business owners represent different industries but they are among the bedrock of the South Florida economy – small companies. About one out of every five people working in South Florida work for a small company – very small – less than 20 workers. Half of all workers in the region work for companies with less than 500 workers.
And those working at these small companies tend to be paid less. Before the pandemic, workers at very small firms were making 83 cents for every dollar made by someone working for a big company with more than 500 workers. A year ago, despite the rapid economic rebound, very small company workers had fallen farther behind, making just 61 cents for every dollar in average monthly earnings versus big company employees.
Even as these small business owners are growing and expanding, they wrestle with rising prices and difficulty finding and keeping workers.
'It's a lot of money'
The latest purchase by Jamie Mardis was assembled, but sitting idle in his coffee roasting facility in late February. Mardis is the owner of Koffee Kult in Hollywood. He had spent $140,000 for a new coffee grinder that can handle 1,500 pounds of coffee an hour.
"It's a lot of money," he said.
It's just one of the six-figure investments Mardis has made in the past several months. There's the $250,000 spent on a new bottling operation for cold brew coffee that begins this month. He anticipates spending another quarter of a million dollars later this year. And there's about $100,000 spent on developing a second robotic arm to help automate packaging.
It is a lot of money for a company that expects to sell about $6 million worth of coffee this year.
Mardis sells direct to consumer. Koffee Kult beans are not in grocery stores and only in a few coffee shops. This business model saved him when the economy shut down two years ago. And then it blew up with people working from home and shopping online. At one point, 95% of his sales came through Amazon at one point. That has dropped to about 60%.
Sales had been growing by 150% a year. That has slowed to 45% "which is OK with us," Mardis said.
Koffee Kult may be a small operation — just a dozen full-time workers and eight part-timers — but it has felt the sting of the global supply chain problems and rising inflation.
Shipping costs for a container of Brazilian coffee has skyrocketed from $1,600 to $6,000. His cost forf bags for his roasted beans has increased from 37 to 57 cents. "Fifty-seven cents times 10,000 bags winds up being a chunk of change," he said.
And so, for the first time in 10 years, Mardis decided to raise the price of his roasted coffee. His profit margin had been as high as $8 a bag years ago. That had fallen to essentially zero with the higher input costs. A 32 ounce bag of his coffee is now $3 more through Amazon.
The company received $100,000 dollars from the first Paycheck Protection Plan program. Three-fourths of it went to keep 11 workers employed. Since then, he has raised employee pay to at least $20 an hour, started a 401(k) employee retirement plan and added health insurance. The company pays 75% of the employee’s premium.
'Reinforced my vision'
Rosanna Bermejo is going back to school while she plans to open a third location of the personal wellness and skin care center she owns. She registered for a nurse practitioner master's degree program in early March.
Bermejo thinks going back to school "will allow me to bring the best technology and the best treatments to my clients."
She started Med Aesthetics Miami 12 years ago in what she called "a little cave" of an office at the University of Miami Hospital. She moved out to a new location in Coral Gables in late 2019. And then the COVID-19 pandemic hit and the business was closed for two and a half months.
She used the time to reassess her business marketing and operations. She got rid of old devices and bought new technologies for skin rejuvenation. She used loans to help finance the investments. There's a second location now in Aventura with plans for a third.
"I think that the pandemic just created increased awareness of why what we're doing is good for people. It just reinforced my vision," she said.
The company has nine full-time employees now. Two years ago, as protective measures were put in place to slow the spread of COVID-19 and the economy ground almost to a halt, she had to let some employees go. Hiring new workers has been a challenge. "One of the reasons why I decided that I wanted to know everything in this company is because that way I can (better) manage and control."
The firm received grants from the two rounds of the Paycheck Protection Program. Together, they totaled almost $38,000 to help keep about four people on payroll.
Mannequins and outdoor dining
There's a large bar in the center of DrYnk Bar and Lounge in Wilton Manors. For weeks in the summer of 2020 no one could legally sit at the bar thanks to COVID-19 restrictions.
That doesn't mean the seats were empty.
Brian Parenteau's business received its first Paycheck Protection Program loan of almost $100,000 to pay the paychecks of 20 people.
Parenteau remembers the first day his business could not open. On March 17, 2020, Gov. Ron DeSantis issued an executive order closing all bars at 5 p.m. that evening. It would be more than three months before the bar could re-open, but without people at the bar itself.
"It looked very, very weird. It felt really weird. It felt like it was just not right with nobody at the bar," he said.
So Parenteau bought mannequins and sat them at the bar. "If you were sitting there having a drink, out of your peripheral, it looked like there were people sitting at the bar."
It worked so well, people passing by the bar's windows would think people were sitting at the bar against the regulations at that time. Parenteau said code enforcement officers visited several times responding to complaints. "We said, 'Yeah, yeah, these are our customers.' They're a bunch of mannequins and we would put fake drinks in front of them."
Those drinks were fake, but customers were returning. Eventually bars and restaurants could reopen without restrictions, and Parenteau was ready with his second business — Tulio’s Tacos and Tequila Bar— about 1,000 feet away from DrYnk.
"It was a very risky time, a lot of anxiety," he said. The restaurant is on a corner, allowing for sidewalk dining. Parenteau credits the ability to put more tables outside with saving his business.
Even today, with the restaurant able to operate at full capacity, he said the outdoor tables fill up first. "I think a lot has to do with COVID. I think people, wouldn't have sat outside two years ago if it was a little rainy or a little humid or a little hot. But now, I think they've almost formed a habit."
Now he's dealing with higher costs and finding workers. He has raised menu prices a little and increased services. "We do two-and-a-half tables a night for server to get that extra cushion," he said instead of the previous one-and-a-half tables per server. "Squeeze a couple of extra customers in to offset the price."
'Like a surge'
When the COVID-19 pandemic hit two years ago, Yesi Leon was already working from home, but her business came to a stop. She is one of three owners of Pandora Events. It produces lesbian events in South Florida and Orlando.
She didn’t start out working in the events industry. She was an insurance adjuster working on claims that were reopened a few years after Hurricane Andrew waylaid parts of Dade County in 1992. Producing events was a side job at that time.
"It was needed in our community back then — the LGBTQ community. There were no lesbians events and we did one. We got 400 women to show up," she said.
After canceling events two years ago and then operating with the uncertainty of when and how to stage gatherings, Leon and her business partners are busy getting ready for their largest event. Girls in Wonderland runs four days in June in Orlando. Out of 700 hotel rooms blocked for the event, only about 25 are available.
"Business is booming now. It's like a surge of women or LGBTQ who want to come out. They want to go to an event. They want to feel good. They want to feel safe, but good," she said.
Pandora Events did not get any of the initial government grants through the Paycheck Protection Program. It did get money from a different program that targeted the entertainment industry. The Shuttered Venue Operators Grant was part of a budget act signed in late 2020. It provided $15 billion for live music and theater operators, museums, movie theaters and live event promoters like Leon’s Pandora Events. And it would be used for more than paychecks.
Leon's firm received a little more than $266,000 from the program last June. "We had to cancel every event. We had to refund a bunch of customers, but that was the right thing to do for our business."
As she waited for business to return, Leon helped organize virtual events and learned an online accounting software.
"We started looking where we're spending our money. How we can add more value to to the customers buying our tickets? And it's 100% better because of it," she said.
As events have returned, costs have increased. The expense for sound and lighting at Pandora's productions ave jumped. Attendees are looking for more VIP moments and Leon is booking more performers including social media influencers. Leon said they are "way less expensive" than singers.