As Small Businesses Struggle, GoFundMe May Be A New Normal
The Saturday Huddle is a weekly column that features opinion, analysis, and reflections on Huddle stories, podcasts, and business news in the region. Derek Montague is a Huddle reporter based in Halifax.
A few months back, I wrote a column scoffing at how overly nostalgic our society has become. Everywhere you look, people are pining for a different decade, usually the 80s. And while the era of shoulder pads and big hair is still beloved, my generation wishes it could go back to the 90s.
The other day I became a hypocrite as I, too, started to think of the 90s, which was most of my childhood. So, I can’t blame you if you scoff at me in return.
This week I wrote about a growing trend in the small business world: the GoFundMe campaign. It was once inconceivable that a for-profit venture could expect a work-a-day person to hand over money and not get a product or service in return.
But 2020 changed everything. For years there have been “buy local” campaigns, especially during the holidays. There have long been fears of our favourite shops closing shop thanks to big box stores and Amazon.
But the pandemic really ratcheted up things that were already becoming trends. Now, we order online more than ever before. With inflation, we are looking for deals that usually only large companies can offer. We aren’t having a nice night out at restaurants. We are at risk of becoming a world where only the giants that offer a lot of everything can survive. Those that specialize and are a bit more expensive might disappear from our streets.
So when I browsed GoFundMe’s website, I saw some sad sights. One of St. John’s last second-hand book shops desperately needs help. So does another book shop out west. Small businesses often can’t afford to recover on their own from unforeseen circumstances. So they need help with broken pipes, broken windows, and debt.
Given everything businesses have gone through since 2020, it’s no surprise that socially conscious people are willing to donate money to keep these places afloat.
Some of the businesses we are losing are due to people’s needs and wants changing. Bookstores may have hardcovers, but they are becoming a hard sell. If people don’t get their books for free from the library, they can buy ultra-cheap Kindle editions on a tablet. And that saves trees from being made into paper. So it’s no surprise we’ve seen so many bookstores close.
Last year even Amazon closed its physical bookstore locations.
But I couldn’t help but feel a little sad when I interviewed Bria Doiron about Flora James Shop (even though she is upbeat and optimistic about the future). She is offering something that should be in high demand: a retail shop that is kid-friendly, eco-friendly, and sells products that are ethically produced.
Doiron is also principled and has great courage. Given the toxic right-wing climate about gender issues (here’s looking at you New Brunswick), many businesses would be forgiven not to stick their necks out. But last March she put on an event where drag performers read to children. It made the news, so of course she still gets some nasty comments even though it was several months ago.
Such a business deserves to be on our Halifax streets, but Doiron now has a $10,000 GoFundMe goal. Everything is expensive, she says, especially rent.
Writing this story is what made my old mind wander back to the “days of innocence” in the 90s. I often forget that I, technically, had an entrepreneurial family. For six years, my dad, with a lot of help from my mother, owned the video rental store in our small Labrador town. It’s so long ago I sometimes forget this was part of our lives.
That store was a testament to how much easier it was for a small business to thrive decades ago. My dad had no prior experience, he never had any business degree, but he made it work. This was the 90s. Everyone wanted to sit back on the weekends with a VHS tape. No one ordered anything online. All you had was your local store.
The business did so well that jealous kids at school would scoff at me and say “your family must be some rich!” I’d be so confused by this allegation that I would give them a puzzled look. We were far from rich.
Running the business required hard work, don’t get me wrong. This was no turnkey operation. My parents had to deal with break-ins, thieves stealing cigarettes. He was always on call in case an employee had a problem. I remember him one time even leaving a get-together at our house on Christmas Eve to fix something. I would hear him say how hard it was to take a trip to the cabin. No cellphones back then, so going fishing or camping meant being out of reach for days.
I remember dark fall nights when me my brother and I would go with our dad in the pickup truck while he went house to house collecting overdue tapes. I was the enforcer in case they forgot to rewind (just kidding).
It was hard work, but it was also, undoubtedly, easier to start a small business in the 90s. When I talk to people who have launched a startup, no matter how small, I’m astounded by the amount of seed money required these days. Anything under six figures seems like a steal.
According to a recent Forbes article, in the United States, the average small business loan is $663,000. Call me old fashioned, but that sounds like the money required to run a big business.
My dad took out a small business loan of $5,000 to get started. That was enough to rent his first space, buy his first set of movies, along with snack food. He had less than $300 left in the till to float him after that.
I know this is just one story, but one can’t help but romanticize how much easier things seemed back then. If you had a vision, a good work ethic, and a solid plan, being your own boss was just a reasonable loan away from being successful.
That’s why it’s tough to see small shops like Flora James asking for help. Doiron has the work ethic, the vision, and a plan. But in our new economic realities (which none of us have mastered yet), that is no longer enough.
Small businesses have never faced so much competition from forces outside of their control. If we want to keep all of them around for a few more years, be ready to visit the GoFundMe website more often.
Editor’s note: This column was last updated on July 1, at 3:00 PM