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Small businesses held out hope the fall would be somewhat normal. Not anymore. Not a chance

Yaniris Vasquez loaded a washer at Wash Cycle Landry in Chelsea last week.
Yaniris Vasquez loaded a washer at Wash Cycle Landry in Chelsea last week.David L. Ryan/Globe Staff

Just a few months. Just get through the next few months.

That’s how many small-business owners approached the coronavirus pandemic in March, when an abrupt shutdown ground the economy to a halt. With a stern mix of patience and thrift, they cut costs, borrowed money, and postponed bills to scrape through spring and summer. By fall, many believed, the worst would be over.

But now, as the virus rages still across the United States, it’s becoming increasingly clear the economy won’t recover for many more months. And some owners are wondering how much stamina they have left, what sleight of hand they haven’t yet tried, to keep their businesses afloat?

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“We’re in a waiting game to see how long we can hold on,” said Rokeya Chowdhury, who with her husband, Solmon, owns three Shanti Indian restaurants and the Dudley Cafe.

Small-business owners such as the Chowdhurys form the backbone of local economies, from the workers they employ to the role they play in their communities. How these Main Street entrepreneurs ride out the pandemic will determine whether some of the nearly 1 million people out of work in the state will get their jobs back, or whether the unemployment rolls will swell even more.

The US economy endured its worst contraction since World War II in the April-June quarter, and new claims for jobless benefits are rising again. At 17.4 percent in June, the unemployment rate in Massachusetts was the highest in the country.

Many small businesses don’t have the flexibility to operate remotely, or the resources to survive a long recession. As unsettling as the spring was, mom-and-pop businesses are bracing for what could be tougher times ahead. Some are undergoing another round of cost cutting and layoffs as they exhaust federal Paycheck Protection Program loans that were supposed to rescue small businesses crippled by the pandemic.

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“Everyone was looking forward to fall,” said Greg Reibman, president of the Newton-Needham Regional Chamber. But those hopes are fading, “and that’s really demoralizing.”

Gabriel Mandujano, chief executive of Wash Cycle Laundry, used his PPP loan to bring back about 40 workers to his Chelsea commercial laundry service. With revenue still off by more than 50 percent, however, he had to let go about 20 workers in mid-June and reduce hours for others.

Wash Cycle cleans linens for hotels, blankets for airlines, and towels for salons and gyms — all businesses hit hard by the coronavirus.

Resigned to many more weeks of business being slow, Mandujano is looking at new markets, such as washing work uniforms and introducing a bike delivery service for commercial customers.

“We are seeing things open up. I am hoping it will be better than it is today,” said Mandujano. But, “I don’t think it’s going to be normal by any stretch.”

Employers with fewer than 500 workers tend to be concentrated in consumer-facing businesses such as health care, lodging, food services, and retail, according to the US Small Business Administration, and those sectors have been disproportionately damaged by the pandemic.

About 36 percent of Massachusetts’ small-business owners are worried they could run out of cash reserves by the end of August, according to a recent poll by Boston-based Alignable, an online network for small businesses. About 38 percent said the recovery has taken longer than expected and they will need additional funds to get by.

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“I’m seeing a lot of people holding their breath and deciding what to do,” said Dan Cohn, a Boston lawyer who specializes in business bankruptcies.

Cohn said small-business owners need another relief package from Washington. Even if only a small fraction of companies consulting with Cohn decide to file for Chapter 11 bankruptcy reorganization, he said it would feel like a “tidal wave.”

Still, even bankruptcy might not save firms that have to go through another lockdown. “If you don’t have sales or operating cash flows,” Cohn added, “bankruptcy can’t help you.”

The promise of a busy autumn for event planner Dusty Rhodes evaporated on July 2 when Governor Charlie Baker declared that indoor gatherings would be restricted to no more than 25 people for the foreseeable future.

“It was like poof — there goes the fall,” said Rhodes, president of Conventures, which organizes some of Boston’s biggest gatherings, such as the Boston Marathon Expo and Boston Harborfest.

Of her 20 clients with fall events, half will go virtual. Five have moved their events to 2021, while the remainder will gather outdoors.

Rhodes said the virus has forced businesses to keep moving the goal posts on when better times will return.

“I’m an optimist,” said Rhodes, yet “there is no end in sight right now.”

It’s been easier for some companies to adapt than others.

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At KleenRite Services, a Ludlow-based office-cleaning company, an initial drop in business was replaced by a surge in customers spending on COVID-19 sanitization and prevention.

Richard Paixao, KleenRite’s president, said the company has avoided layoffs, with help from the federal Paycheck Protection Program, which made forgivable loans to small businesses.

“A lot of the work is back. We’re pretty close to capacity,” he said.

Small businesses have suffered more here than in other parts of the country, largely because Massachusetts shut down earlier and reopened more slowly than most states.

Small-business revenue in the state is down 32 percent this year, compared with a 17 percent decline nationally, according to data tracked by Opportunity Insights, a research project at Harvard University. And there are 22 percent fewer small businesses open now in Massachusetts than in January. Nationally, there are 15 percent fewer small businesses open.

Restaurants, in particular, face a long road back with the Massachusetts Restaurant Association projecting that about 3,600, or nearly a quarter of the state’s eateries, won’t survive the pandemic.

The toughest part for many business owners is the uncertainty — not knowing whether the Commonwealth will see another wave of infections or move slowly but steadily forward.

“We cannot have any expectations at all,” said Amanda Rojas, owner of Amanda’s Flowers in Brighton.

Her survival plan has been to do much of the work herself, from delivering flowers to making arrangements. Business is down at least 30 percent, with weddings postponed, funerals restricted, and fewer customers dropping in.

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Online sales now surpass pickup orders, but the margins are smaller.

“The business I had before is not the business I have now,” said Rojas, who has been a florist for more than 30 years. “I just feel the business is going to be totally different from now on.”

Armed with a PPP loan of $89,000, the Chowdhurys have reopened three of their restaurant locations in Boston and brought back some of their 35 full- and part-time employees.

In May, the couple was hopeful the economy would bounce back. But that optimism has faded. When they resumed sit-down service in July, demand was weak — just about 6 percent of pre-pandemic levels — and it became clear that patrons weren’t ready to dine in again. Normally the Chowdhurys could count on returning college students to give their Shanti restaurants in Dorchester and Cambridge a boost in the fall, but not this year with campuses largely going remote.

With their federal loan money gone, the Chowdhurys are tightening their belt again, negotiating with their landlords, contemplating whether they can keep all four locations — while waiting for a solution that is out of their hands.

“Now we’re really in a place of how do we at least keep going for six months, eight months, or a year until there is some sort of vaccine,” Rokeya Chowdhury said.


Larry Edelman can be reached at larry.edelman@globe.com. Follow him on Twitter @GlobeNewsEd.