Minnesota small businesses brace for coronavirus

Ajax Metal Forming Solutions needs to stay open and keep the factory lines moving.

Otherwise, it might not weather the economic consequences of the coronavirus pandemic.

So co-owner and plant manager Brandon Holmes now starts each work shift reviewing the latest Centers for Disease Control and Prevention advisories with staff. He is one of thousands of Minnesota small-business owners bracing for possible illnesses, supply-chain disruptions and other economic forces beyond their control.

One thing Ajax can control, Holmes said, is toughening his sick policy and increasing cleaning at the Fridley metal-fabrication shop. The company fired its cleaning contractor and hired its own staff for more quality control in deep cleaning of machines, doors, keyboards, lunch tables and bathrooms.

Over three weeks, Holmes has ordered seven sick workers to go home, including himself.

"It's a transition time and you don't know if it's a cold, influenza A, influenza B or now the coronavirus. But it was something that we had to get out of the shop," Holmes said. "It's a policy we've taken a turn on. It's inevitable that whenever someone gets sick they want to come to work. But we have sent [them] home. If it's an extended period of time they're sick, we'll work with them."

What he knows is that if the factory had to shut down for 14 days during a quarantine, it would cripple the operation. "It really, really would," he said.

Cases are expected to increase, prompting the cancellation of flights, classes, and sporting and business events around the globe. The expected economic hit is so dire it moved the U.S. Small Business Administration Thursday to announce new low-interest loans for small firms losing money because of the coronavirus.

"The SBA's Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing," said SBA Administrator Jovita Carranza in a statement Thursday.

The week's events caused Ingrid Christensen to look at how she can cut costs immediately from her Minneapolis-based INGCO International, which provides interpreters worldwide.

Christensen, named Minnesota's Woman-Owned Small Business of the Year by the SBA on Tuesday, said Medtronic and Mazda canceled two key events in the last two weeks that cost INGCO about $250,000 in business.

INGCO was supposed to provide the interpreters for a group of Japanese doctors flying in to attend a Medtronic symposium in Minnesota. But Medtronic called to cancel the event, saying the doctors weren't coming after all because of the virus. The call came too late. Christensen's top interpreter was already on an airplane and headed to the Twin Cities.

"This is a huge disruption to us and our industry," she said."It's a messy, messy time right now. I have never seen anything like this."

Now, she's trying to save as much cash as possible and is reaching out to health care providers and others for new business, but so far that has not worked.

"A lot of our interpreters are refusing to take jobs right now because they are afraid," Christensen said. "They don't want to go into a school setting when they don't know what they will walk into."

As INGCO reassesses its priorities, Christensen said she's "so freaked out," she's cleaning her 10-person office three times a day herself. She's also showering workers with personal oils in an attempt to boost immune systems. "It's whatever works for you," she said.

David Deeds, an entrepreneurship professor at the University of St. Thomas, said smaller companies could see revenue plunge 30% to 50% over the next 12 months. All small businesses must do the budget work Christensen is doing now, he said. They need to put off purchases such as equipment if possible and prioritize now which employees cannot be laid off and who could be furloughed if necessary.

"There will be things in your business that are good for people spending a lot of time around the house. And let's face it: We are all going to be nesting for awhile," Deeds said.

"It's really about preparing the finances of the business so that you can get through this and come back when this virus [phase] is all over," he said.

Many manufacturers are dealing with effects of trade disruptions and a tight labor force, which has made it hard to cover for sick workers.

Already this year, Traci Tapani, who co-owns Wyoming Machine in Stacy, Minn., with her sister Lori, said she has had to jump onto the shop floor repeatedly to cover for sick workers. Tapani said she doesn't want employees who have used up sick leave to come back to work, so she's working on a new policy.

She and her sister also are prioritizing tasks plan in case of more sicknesses. Not much is considered "nonessential."

Last month, one customer wrote the sheet-metal fabricator asking pointed questions about the strength of its supply chain during this health crisis. Did Wyoming Machine have suppliers based in China? What was Wyoming Machine doing to prepare for a coronavirus? What were its contingency plans?

"In our business, there is not a lot that you can do about it," Traci said, noting that she runs a machine shop with lathes, drills and welding. "People have to be here in order to do the actual work." Tapani said.

For Paula Trenda and her six-worker Curly Girlz Candy Inc. in Owatonna, Minn., the supply chain is a key concern.

In December, Trenda — named Minnesota Small Business Person of the Year last week by the SBA — preordered a large batch of a sugarless sweetener made in South Korea that Curly Girlz uses to make sugar-free caramels, toffee and brittle. The order was placed to capture the best pricing and should sustain the company for months — provided she can get the deliveries.

Trenda uses a distributor in Washington state — which currently has the most cases of COVID-19 in the U.S. — to store and ship the specialty sweetener. The Washington warehouse ships a batch to her every month, so there's a concern that any restrictions put in place to contain the virus there could affect business here.

So she's hoping the pandemic will not deeply disrupt Curly Girlz Candy. Even with the stress of the outbreak, "If you have the passion for what you are doing, then I would say follow your dreams. But know it is not always going to be easy," she said.

Dee DePass • 612-673-7725