Hunterdon businesses have been hit hard by the pandemic. Here’s data that proves it. – NJ.com

When Ben Webb opened the Huntington Learning Center in Flemington last November, he felt prepared to handle the worst.

“When I built my business model originally in figuring out how much capital I was going to need and everything, I worst-cased it,” Webb said. “And I said, ‘Okay, what if I don’t make a nickel in the black for a year? Will I be able to sustain?’”

Then, the coronavirus pandemic hit — and the impact to his business was even “worse than I worst-cased it.”

“Losses in revenue are between 85 and 90 percent,” Webb said. “Because of the costs of switching to online and having to market that aggressively … I’ve even had to dip into my savings personally.”

Webb is one of the many Hunterdon County business owners who have emerged far from unscathed by the effects of the coronavirus epidemic — which continues to surge across the state, with high case numbers being reported daily. He and other local business owners have relayed their financial hardships in surveys circulated by the Hunterdon County Chamber of Commerce evaluating the impact of the pandemic throughout the region.

Approximately 50 businesses — 93% of them in Hunterdon County and others in nearby counties, including Mercer, Somerset and Warren — responded to a survey circulated by the Chamber from early September to the end of October. According to Chris Phelan, president of the Hunterdon County Chamber of Commerce, the participants are largely evenly spread across various industries, including industrial, health care, finance and retail, and the “lion’s share” of them employ less than 50 people.

On average, these respondents have lost between 30% to 35% of their revenue because of the pandemic. Roughly 70% of them indicated a loss of sales and limited access to customers have negatively impacted their business, Phelan noted.

“Now we are seven or eight months into the pandemic, and obviously all of the various industries have been impacted different ways,” Phelan said. “Closing restaurants at capacity is one of the great impacts that I continue to hear, and the limited capacity — now as we’re moving into colder months — that seems to be definitely something that’s going to continue to be felt by hospitality, restaurants … and ancillary facilities like banquet halls.”

Almost half of the respondents have reduced their work hours as a result of the pandemic, and approximately 20% have laid off employees. Thirty-five percent of those who have laid off employees have reduced staff by over 50%, and another 35% by one-quarter, Phelan said.

Ongoing hardships foreseen by initial fallout

These numbers reflect the continuance of a struggle first ignited in the earliest days of pandemic. 200 businesses — the vast majority located in Hunterdon County — responded to an initial survey circulated by the chamber from mid- to late March of this year and nearly 80% indicated they were negatively impacted by the pandemic, with close to another 20% anticipating that they would be negatively impacted.

Similar to the most recent survey, half of the respondents reduced work hours during the epidemic. Seventy-nine businesses in total cut staff by more than 50%.

Again, the majority of respondents — more than 66% — indicated a loss of sales and limited access to customers to have negatively affected their business.

In the first survey, almost 64% of respondents anticipated only being able to operate for another zero to three months. In the latest survey, Phelan said the majority responded that they borrowed money though loans or lines of credit to remain viable.

“Followed behind that was the laying off of staff, and then reducing operating hours,” Phelan said.

Thirty-six percent of respondents to the latest survey circulated indicated the pandemic and the ensuing economic downturn impacted their need for access to purchasing equipment, while another 36% pinpointed the impact upon their business models, according to Phelan.

“Everybody had to look at their business model, their delivery. Even if you were professional services, now you have your employees working at home,” Phelan said. “And I think the purchasing of equipment is indicative of how businesses have had to change so rapidly and quickly, whether it was gearing up for PPE for their employees, how do you make their environment safe, an e-commerce platform they didn’t have prior. All of those measures I think have caused businesses to spend money.”

Sixty-two percent of the businesses received assistance through the state’s Personal Protective Equipment Access program, with others receiving aid through Economic Injury Disaster Loans and the New Jersey Economic Development Authority.

“Out of all calls that we have gotten throughout these months, access to capital is something that probably overwhelms the number of calls we get in here,” Phelan said. “These other programs — folks on the lending side I’m sure — are evaluating the ability for these folks to pay back the loans as well. So that becomes a double challenge as the months go on, especially for the small businesses.”

An in-depth look

The Huntington Learning Center’s immense loss of sales during the pandemic dates back to the beginning of its protracted closure, Webb explained.

“Once the governor closed us down, it took several weeks for us to adapt our business model to online instruction, and that allowed us to continue serving our customers that we had, but our new customers dried up completely,” Webb said. “And for several months we had absolutely no new customers, hence no new revenue.”

The process of adapting the company’s business model from an in-person to online learning center created an additional financial burden for the business.

“We had to retrain our staff — which took a significant amount of time — and familiarize them with online platforms,” Webb said. “Some had taught online but most had not, so that was an important part of being able to adapt, but it was also a very time-intensive and expensive proposition.”

The Huntington Learning Center has “very slowly” regained clients in the past month, buoyed by the cuts and personal financial sacrifices Webb has made to keep his business afloat and keep all 15 staff members employed.

“(Laying off) was something I worked very, very hard to not do. Because I think as long as I am able to have hours from my employees, I’m going to do my best to hang on everybody — even if it means I have to cut back in other areas, which really I already have,” Webb said.

Other business owners did have to temporarily lay off their staff when the pandemic hit, including Anne Thornton, the president of MSI Plumbing & Remodeling in Lebanon.

“I laid off almost all of my people, except for maybe one or two people in the office and maybe two to four guys,” Thornton said.

Thornton also completed the two surveys circulated by the chamber, within which she indicated supply chain disruptions as one of the primary ways her business was altered by the pandemic.

“We do all kinds of plumbing, whether we give you a beautiful, new faucet or we fix the leaky faucet. And when the governor shut down the state, we immediately lost any kind of business that wasn’t emergency plumbing,” Thornton explained. “And we lost immediately all of our remodeling business — the phone just stopped ringing.”

The slowdown in services forced Thornton to reduce her staff of 20 by two-thirds, and inflicted a 10% loss of revenue on the business. However, in the span of a couple of months, the phone began ringing again — for reasons Thornton in part credited to the pandemic.

“After people started to understand protocols and safety and wearing your mask, people started calling again,” Thornton said. “And then by June, I had everybody back … just the nature of our business, especially because people were staying home a lot more and using their bathroom everyday and thinking, ‘God, I hate this bathroom, I want to remodel this bathroom,’ we’ve been a beneficiary of some of that attitude.”

Thornton also adapted her business to accommodate circumstances created by the epidemic.

“We started researching all these new products that we can install on people’s furnaces, or new filtering systems, or touchless faucets,” Thornton said. “And I’ve been doing a lot of advertising about that and have gotten a very good response, both residentially and commercially.”

Reflecting on Gov. Phil Murphy’s recent implementation of new restrictions due to the rising number of positive cases, Thornton said she “welcomed” rather than feared the sudden changes.

“It gave me as a business owner more reason to implore with my employees, when they go to a customer’s house, to make sure the customer has a mask on, etc.,” Thornton said. “It solidified that these are things we really need to do, and we have to do these things together, and to me that just adds to this huge need that we all have to follow these rules, or we’re going to be in much worse shape.”

She said the resilience of her business of 30 years reflects her ability to adapt to change, adding that the pandemic presents “an opportunity for a lot of businesses” to do the same.

“You better be ready to change and be agile — because the future is not going to be the same as the past,” Thornton said.

Webb has dually evolved his business in response to the epidemic. But, unlike Thornton, he acknowledged that as long as the coronavirus continues to pose a threat to the public, the future of the Huntington Learning Center remains uncertain.

“We’re going to have to see more of an uptick in business to continue to provide the great services that we do to the children of Hunterdon County,” Webb said. “I’ve really never quit or given up on anything, and I’m going to do my very best to keep us up and running … 2021 I’m optimistic will be a better year, but that’s just looking in a crystal ball. There’s nothing concrete to indicate that.”

Should the state consider a regional approach?

On the heels of Gov. Phil Murphy announcing the new restrictions for businesses, Webb expressed his support for a regional approaching to reopening and closing the state — an action which more than 75% of businesses favored in the chamber survey.

Hunterdon County continues to be among the counties in the state reporting the lowest number of new coronavirus cases each day, with 15 new positive tests reported on Thursday. In comparison, Essex County topped the list with 410 new positive cases.

“My business is impacted by the success of other businesses, so I think a regional approach would probably be effective because we are not as densely populated as the northern part of the state, and we’re not as close to the city,” Webb said.

Thornton said she has “mixed feelings” about a regional approach to the epidemic.

“I just think once you start saying, ‘Well this group gets excluded,’ or ‘That group gets excluded,’ the populous gets confused,” Thornton explained. “Someone can say, ‘Well I live right next to Hunterdon … I’d be fine. I don’t have to do this.’ Some of my employees live in Pennsylvania and come here everyday.”

“For me, I just think we have to do everything we can to get a hold on this. And if you just keep breaking it down, and making exceptions, you’re watering down what you’re trying to do,” she added.

In contrast, Phelan expressed his trust in business owners’ ability to follow protocols enforced by the state regardless of whether they are more stringent in other areas.

“I think when you look at Hunterdon and Northwest New Jersey here, although we’ve had so many families impacted and the loss of life — which is tragic — and we don’t want to give up safety over a business succeeding, I think any good business owner wants to make sure that their employees, their customers, are safe, or they’re not going to be in business,” Phelan said. “There’s going to be a natural disconnect, a natural reaction from customers not supporting them.”

He also emphasized his wish to remain positive for what lies ahead for the county’s businesses — while acknowledging that the worst may not be over yet.

“We don’t know when the economic downturn is going to start to turn the other way … and I don’t think we’ve hit that turnaround point yet,” Phelan said. “I think you’re starting to see, and I think obviously this surge in the numbers, starts to put caution back it the little bit of optimism we would have had otherwise.”

Thank you for relying on us to provide the journalism you can trust. Please consider supporting NJ.com with a subscription.

Caroline Fassett may be reached at cfassett@njadvancemedia.com