Stories of resilience and entrepreneurship are very encouraging to learn about in these challenging times.
-Angela Valenzuela
Tom Reel /Staff photographer
Texans are rushing to start businesses during the coronavirus pandemic. Why?
By Madison Iszler, Staff writer
When the coronavirus pandemic forced Pinch Boil House partners Sean Wen and Andrew Ho to close their downtown restaurant for months, they decided to use the extra time to check off an item on their to-do list.
They reached out to South BBQ & Kitchen owner Andrew Samia about opening a restaurant combining Southeast Asian curry with Texas BBQ, an idea they’d been contemplating for a while.
“We just never had the time to do it because we were caught up in the everyday stress and struggle of running a restaurant,” Wen said.
The trio teamed up on pop-ups to test out their idea before opening a permanent Curry Boys BBQ location at 2334 N. St. Mary’s St. last month. The building is small and the restaurant doesn’t require much staffing — it’s a low-cost set-up, Wen said.
Customers can take their meals to go or eat at picnic tables outside. While traffic at Pinch Boil House downtown is still about half of what it was before the pandemic, Curry Boys BBQ has sold out every day since opening.
“Too early to say if we’re crazy or not,” Wen said, laughing. “I’m going to count my blessings for now when I have them.”
With COVID-19 cases rising again in San Antonio and winter approaching, the restaurant might add delivery or to-go family packs.
“We built this thing with the idea that it could scale for the future,” Wen said. “Obviously, the future for food and beverage, for better or for worse, is skewed toward … ease of take-out or contact-less ordering and delivering.”
Starting a business during the coronavirus pandemic — which is ravaging the economy, throwing employees out of work and disrupting myriad industries — may seem crazy. But plenty of people are considering striking out on their own, even as hordes of businesses fold permanently.
Census data shows business applications for employee identification numbers have risen in recent months, totaling more than 3.2 million over the first three quarters compared to about 2.6 million during the same period last year. That includes independent contractors and gig-economy workers.
The number of startups that are likely to become employers — as gauged by so-called “high-propensity business applications” to register the ventures with the government — reached a record level in the third quarter. In Texas, they are up about 19 percent across the first three quarters of 2020 compared with the same stretch in 2019, seasonally-adjusted data show.
The COVID-19 recession may be one of the biggest motivators for these entrepreneurs.
Layoffs and uncertainty about future unemployment may be pushing more people to take their working lives into their own hands, whether that’s turning a side hustle into full-time work or finally fleshing out a business idea they’d been gestating for years.
“They’d always been thinking about doing their own thing, and (the pandemic) ended up being that sort of trigger point,” said Luis Martinez, director of the Center for Innovation and Entrepreneurship at Trinity University.
Another factor: new opportunities created by COVID-19. The virus has reshaped how people work, attend school, shop and spend their free time, and there’s money to be made with each change.
Just think of face masks, said Thomas Tunstall, research director at the Institute for Economic Development at the University of Texas at San Antonio. For many wearers, they’ve become small fashion, or personal, statements. Somebody has to meet the demand for face coverings that tell something about us to passersby.
There’s also the fact that entrepreneurs may also be able to borrow at lower rates than before — through Small Business Administration programs or micro-lenders such as San Antonio-based LiftFund — or lease space more affordably.
“We live differently than we did before the pandemic started,” Tunstall said. “The economy is essentially restructuring in response to different demand patterns.”
Test market
COVID-19 is the reason Meghan Garza and Juan Cano launched BexarAid. Their startup provides testing for the virus for individuals and businesses.
It began as a website they set up this spring to connect essential workers with people wanting to donate masks and other protective gear. But conversations with friends in health care prompted them to shift to COVID-19 testing. They wanted to provide a quick, efficient way to get tested in South Texas.
BexarAid offers drive-thru testing at a facility near the Pearl for $150, an at-home test for $200 and mass testing for businesses and organizations. Customers can set up appointments online for the polymerase chain reaction tests, which are administered by medical assistants hired by BexarAid.
The company partners with several laboratories. Results currently are delivered the next day, though they’re guaranteed within 48 hours, Cano said.
BexarAid was providing about 2,000 tests a week on average in July — one of the peaks in San Antonio’s COVID-19 cases — and has worked with “dozens” of employers, Cano said.
Garza and Cano aren’t strangers to starting a business: the pair launched companies together and individually before the pandemic. With BexarAid, they hope to help flatten the curve and “get us out of this pandemic as fast as possible,” Cano said.
“We’re extremely blessed that it’s now an actual business,” he added. “We were not intending for it to be. I think entrepreneurship can many times be accidental, but it doesn’t make it any less rewarding.”
The pace of U.S. business applications is starting to drop back to pre-pandemic levels, but still remains elevated compared to last year, according to an analysis of census data by the Economic Innovation Group.
Many of the new startups are non-store retailers; personal and laundry services; professional, scientific and technical services; administrative and support services; truck transportation; and restaurants and bars.
There are caveats. Applications in some of those sectors are automatically marked as businesses with a higher likelihood of hiring workers even if that’s not necessarily happening, and the data includes some acquisitions of existing companies, the public policy organization noted.
It’s hard to tell “how much of the increase is attributable to entrepreneurs finding opportunity in the crisis to form businesses likely to hire employees as opposed to newly unemployed individuals starting their own businesses,” EIG said in the census report. “The latter are more likely to be non-employer firms (opting for self-employment) that are not well-positioned to fuel a rapid jobs recovery.”
“Nevertheless, the sustained and unprecedentedly high rate of new business applications hints that the current crisis could be part of an accelerating restructuring of the economy, as entrepreneurs and everyday workers adapt to a new economic reality,” the organization said.
San Antonio Startup Week, a conference for startups and entrepreneurs, was held online in October due to the pandemic. As part of the event, attorney David Jones participated in a free legal clinic to help aspiring entrepreneurs in under-served communities set up their own businesses.
More than 50 people signed up in one day. Legal clinics typically draw decent turnouts but “everybody who was involved in it was frankly kind of blown away that the interest came as fast as it did,” Jones said.
Attendees consulted with attorneys and filled out paperwork for limited liability corporations, which costs about $300 to register. The clinic helped form about two dozen startups, a number of them launched by Black, Latino, LGBTQ and women entrepreneurs, Jones said.
“It’s just an absolutely joyful experience to see people get as excited as they get when they realize ... ‘I’m a real live business owner,’” Jones said, adding that he hopes to organize another clinic before the end of the year.
Anastasia Calhoun was already launching her own business when the pandemic began.
The kernel of an idea started materializing about two years ago. After benefiting from massage treatments, Calhoun started researching spa kits with upscale organic products to use at home but couldn’t find what she was looking for.
She decided to start her own venture, selling handcrafted skin and body care products through a subscription model. She set up a limited liability corporation for the business, dubbed Godtliv, and targeted an April launch date.
Cue the pandemic. When it disrupted the supply chain for the materials and ingredients she needed, Calhoun switched to selling items she already had in stock through an e-commerce website and launched just a few weeks later than planned.
Another COVID-19-related upheaval followed. Calhoun, an architectural researcher, was furloughed and later laid off from her job in architecture. After her apartment lease ended, she headed to Oklahoma, where some of her family members live.
“In one sense, it does suck, but on the other hand, I was already so invested in it both emotionally and financially that to stop it I think would’ve been worse,” Calhoun said of starting a business during the pandemic. “If I had been at a different spot in the business development process, no, I probably would not have opened it.”
With people stuck indoors and grappling with pandemic-induced stress, it’s also a good time to be selling self-care items. And an e-commerce concept fits the current business conditions, Calhoun said.
Aside from working on Godtliv, she’s part of a team that received a grant to research the intersections of climate change, racial justice and pandemics in the built environment.
“Even though everything’s so uncertain, I’m really loving my day-to-day right now,” Calhoun said, laughing. “My office smells amazing ... I’m not opposed to taking something in architecture again, but if I can build this, I’m pretty happy here too.”
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