Eight months and several regulations later, Lanning said it has been a challenging year.
“The last eight months have been a roller coaster,” Lanning said. “I’m a small-business owner who is supposed to promote social gatherings to stay open in the middle of a pandemic. ... How do you do that?”
While the effect of the coronavirus on cities’ sales tax revenue has varied throughout the Houston region—with Katy seeing lower revenue compared to 2019—small businesses in the community have felt the financial strain of the pandemic for the past seven months.
“Local government is only as strong as the local economy,” said James Thurmond, a former city manager and current graduate professor in public administration at the University of Houston. “[If] they don’t have money coming in, they can’t provide some of the basic services they need to provide.”
Although the pandemic has led to a drop in sales tax collections in Katy, Director of Finance Andrew Vasquez said grocery stores, businesses that were able to stay open due to carry-out orders, and Buc-ee’s helped carry the city when Katy Mills mall was shut down.
“We were actually surprised the sales tax revenue did as well as it did,” he said. “We get the benefit of people traveling through Katy and spending money at Buc-ee’s.”
Reinventing the wheel
Lanning, like other business owners around the world, was forced to create a new business model overnight.
With approval from Fort Bend County, Lanning was able to offer curbside pickup for painting kits, which slightly increased spending because materials that were typically reused were now being sold.
However, that was not sustainable, and business slowed again once the mask orders went into place the week of July 4. “Nobody was coming,” Lanning said. “I couldn’t get an adult in here to drink and paint if it saved my life. I had to shut it down.”
Ida Franklin, the owner of Venus Construction in Katy, said she lost two employees in the initial stages of the pandemic and started having supply chain issues.
“We have a horrible time right now getting appliances,” Franklin said. “Anything made in China or anywhere overseas is taking way longer to get here. Things that normally take a couple of weeks to arrive are taking months.”
Franklin said Venus Construction has struggled a little in getting parts to complete a job due to factories closing overseas in March and April, but manufacturing is picking back up.
“The things that we would be selling now are things that they would be manufacturing back in March and April,” Franklin said. “They just started reopening, so now they are having to play catch up, but it’s going to take months.”
Venus Construction opened in 2006 and specializes in high-end kitchen and bath remodels as well as commercial remodeling and build-out.
“I talked to my employees at length about not putting themselves at risk unnecessarily, being careful and wearing masks,” Franklin said. “Especially after we went through [COVID-19] at my house, it was terrible. I wouldn’t want to wish that on anybody. Having to quarantine and separate yourself from each other in the house, and if people have kids, I can’t even imagine telling a kid they can’t hug their mother.”
The most severe decreases in sales tax revenue may not have happened yet, and local governments need to brace for those, Thurmond said.
The COVID-19 recession, which is considered to have started both domestically and globally in late February, is unlike any other economic downturn in recent history, Thurmond said: It could potentially be much longer-lasting than a traditional recession.
“We haven’t hit the low point yet,” he said, adding that local governments must spend money and create budgets wisely. “I would not be very positive right now. ... I would be cutting back.”
Lanning reached out to Fort Bend County for a grant to help stay open during the lockdown, but Pinot’s Palette’s locations in Cypress, Sugar Land and Memorial City have all closed since the pandemic hit the Greater Houston area.
“Ask if you are struggling,” Lanning said. “It is just awesome how they help if we need it. I’m hoping it’s going to be a stellar holiday season—maybe just without the crowds.”
A silver lining
Although the restaurant and entertainment industries have suffered during the pandemic, other industries have thrived.
Venus Construction is booked until mid-December.
“We’re very fortunate to have a good business base,” Franklin said. “We’re just trying to keep up with the business we have. In our construction and remodeling industry, it’s crazy busy right now, so there’s not that much unemployment. I know there are lots of people unemployed and lots of people are struggling, but we’re not struggling.”
The YaYa Club Clothing Co. located at 123 FM 1463, Katy, was another business that saw success since the pandemic, according to Lanning.
Although initially the owners were unsure on how they would continue, they quickly found a way to leverage the internet and social media to kick up sales.
“I always think God puts people in your life that you need to learn some stuff from, and during quarantine I was watching all their videos,” Lanning said. “They go on Facebook live because they are a boutique—people come in, people touch clothes, people try things on, and we were shut down.”
Livestreams included the owners presenting certain clothing items with descriptions and an assigned number to make it easy for customers to buy online, co-owner Robin Ebrecht said.
“We started making masks for companies, for individuals, and clear shields because teachers, administrators and hair stylists wanted to be able to talk and see their clients,” Robin said. “We just tried to adapt and change with the rules and the laws.”
The YaYa Club offers clothes, jewelry, a men’s section, and masks and hand sanitizer.
“I want to thank the community for supporting us and shopping local,” Ebrecht said. “It’s been really amazing. We were surprised that we didn’t fall that far behind last year’s sales, even through all of this.”
Ebrecht’s son, Tanner, owns DiamondFit Performance Katy. The athletic facility shut down in the early days of the pandemic, Tanner said.
The North Carolina-based business specializes in training youth and high school athletes with some adult training classes.
Although the gym has lost a bit of money this year, Tanner said the staff was prepared for it and looking ahead.
“I would imagine a similar story in most places,” Tanner said. “We were operating normally, ‘boom’ everything shut down, and we just had to adjust and overcome all the adversity. I hope we are on the back end of it. We’re pushing through. We are just trying to give our service and help everybody out.”