‘The Need is Not Going To Go Away’: Resiliency Fund helps soften pandemic’s grip

by Amy Lane

Chocolate maker. Alpaca farm. Experiential bookstore. Winery. Preschool center. Kombucha company. Differing businesses, all challenged by the COVID-19 pandemic. And all helped by a local fund offering aid to the smallest of the small: Businesses with nine or fewer employees.

Borne to help businesses that are the backbone of the Grand Traverse region’s economy, the four-month-old Regional Resiliency Fund has awarded grants of up to $5,000 to support those impacted by the pandemic.

The grants have paid for basic expenses as well as new directions, and provided cash to help recover from closed doors and lost sales. Though small in size, the awards – totaling $304,800 in the region as of early September – have made a big difference.

Take Great Lakes Chocolate & Dessert Co., a fledgling Traverse City business run and staffed by David and Shana Sicotte. In 2018, the two started their venture to make “bean to bar” craft chocolate – buying whole cocoa beans, roasting and grinding them into small batches and producing bars, truffles and confections that are sold on the company’s year-old website and in a few local markets.

But the majority of company sales have been wholesale, such as supplying truffles in wineries’ tasting rooms and desserts at wineries’ private events – and those sales plummeted as a result of the pandemic, accompanied by declines at retail outlets.

With sales down more than 50%, the company could no longer buy cocoa beans in bulk and had to purchase smaller quantities at higher prices, said David Sicotte.

“Our profit margins tanked basically because we were paying such a high price per pound,” he said. “We had to get our margins back in line if we knew we were going to get through this. It was very important to obtain some funds to get us back on track in that area.”

The company received a $3,500 grant to help it buy in bulk as well as cover costs associated with rolling out new products like milk chocolate bars, a move to attract new customers and capture attention, while focusing on social media audience and online sales.

“We’re just crossing our fingers that we’re taking the right steps to survive,” said Shana Sicotte.

The duo hope that by seeding business expansion and buying larger quantities of beans, they can push toward their eventual goal: a brick and mortar location.

“We put everything we had in our entire life into this business to get it started,” Shana Sicotte said. The small funding opportunity “has really given us great hope that this is going to keep us going, keep us rolling as a business. It was our dream.”

Capitalized with donations from energy companies, community foundations, financial institutions and others, the Regional Resiliency Fund as of early September had awarded $200,000 in a first round, $83,000 in a second round and $21,800 in a third round to 114 small businesses in its target region of Grand Traverse, Leelanau and Benzie counties.

Requests have far outstripped available funds, with more than 300 applications seeking $1.4 million in the first three grant rounds. It’s a testament to need, said Laura Galbraith, executive director of Venture North Funding & Development, which operates the program in partnership with economic development organization Traverse Connect.

Situations vary. Some businesses have needed additional money to pay employees more to retain them; others are trying new business directions and need marketing, software or equipment to support the shift; and many require inventory or help meeting basic expenses like rent or utility bills.

Some businesses were forced to close earlier in the year due to the pandemic and they and others have had difficulty recovering lost sales, leaving them with low cash reserves.

As a group, the smallest businesses in the three counties are large in number – of 9,802 total businesses in the region, research identified more than 8,000 with nine or fewer employees.

“I think we knew that it was a large number; I don’t think we realized it was that large,” Galbraith said. “Our economy is comprised of extremely small businesses and many of them we know are heavily reliant on tourism.”

One is Crystal Lake Alpaca Farm in Frankfort, where husband-and-wife owners David and Chris Nelson put their lives into the care, feeding, breeding and showing of the engaging, gentle animals. In a usual year, visitors from around the country and abroad number high among patrons at the farm that houses some 60 alpacas and two boutiques selling alpaca products.

But 2020 is not a usual year. Sales at the boutiques – which provide the majority of revenue that supports the farm’s operations – took a hit from a late seasonal opening due to the pandemic, fewer tourists and consumer caution about spending. Boutique sales dropped as much as 50% in late spring/early summer and remain down from previous years, while expenses and obligations – to five full- and part-time employees and the alpacas, donkeys, goats and llama in the farm’s animal park – continue.

“It’s just been a struggle as I’m sure it is for every business owner,” said Chris Nelson. “It’s really hard when you have not just people depending on you for an income, but also animals.”

She said a $2,500 grant from the Resiliency Fund helped pay employee wages, mortgage, insurance and large electric bills stemming from fans needed to keep animals cool in the summer and air conditioning in the boutiques.

The money provided more than just a financial boost.

“It also gives you a little faith back,” Nelson said. “It’s a mental thing. You’re struggling, all you’re getting is bad news, you’ve got bills, your stomach’s in knots … and then you get this and it’s a little bit of hope. It’s enough to take you to the next level.”

McKenzie Gallagher, co-owner of Rove Estate Vineyard and Winery, agreed. She said a $3,500 grant the Traverse City winery received is a “big help” and it “isn’t just about the money.”

“It’s a vote of confidence in us, like, don’t give up, we believe in you,” she said.

Gallagher said the winery lost significant spring revenue when events, weddings and rehearsal dinners came to a halt. She said she and husband Creighton “are big believers in pivoting and adjusting” and “started to shift gears” and do more virtual tastings and happy hours, connecting to consumers “and making people feel like they were here, even if they were staying home.”

Rove’s wine club “has really taken off this season,” Gallagher said, but overall business costs have risen about 20% this year. The winery applied to the Resiliency Fund to “help offset some of these costs that we’ve had to absorb.” The grant has helped pay for expenses including cleaning and sanitation, additional staff, changes in serveware and personal protective equipment. Rove has nine employees, including four new hires.

Gallagher said it’s a credit to the region to have resources like the Resiliency Fund and invested stakeholders committed to supporting the local economy and small businesses.

“It speaks volumes,” she said.

The Resiliency Fund was launched with a $200,000 grant from the Consumers Energy Foundation, as part of $1.8 million the foundation donated to community organizations supporting small businesses throughout Michigan.

The fund has since received $50,000 from Cherryland Electric Cooperative, $40,000 from the DTE Energy Foundation and $25,000 from the Leelanau Township Community Foundation for use specifically in the township.

Also contributing to the fund: The Grand Traverse Regional Community Foundation (GTRCF), $13,500; TCF Bank (formerly Chemical Bank), $10,000; the Milwaukee, Wisc.-based Brookby Foundation, $10,000; two Venture North board members, $2,000;  and individuals, $1,450.

Additionally, donations supporting administrative expenses and technical assistance to help businesses obtain other COVID-related aid have come from Fifth Third Bank, $15,000;  Huntington, $7,500; and GTRCF, $1,500.

All told, the fund as of early September had received $375,950 toward a goal of $500,000. Additional contributions will spur new grants; there have been discussions with additional counties interested in being involved in the program.

“I think it’s our collective hope that we can keep on going with this,” said Tim Ervin, a consultant assisting Venture North with fundraising and media relations. “The need is not going to go away.”

At Building Blocks Preschool and Child Development Center in Traverse City, a $3,500 grant helps with utilities, increased cleaning costs and supplies and other expenses to meet the needs of children and families, said owner and director Amy Mayersky.

She said the center, which has about 30 children ages two-and-a-half through six, closed in March. When it reopened in June it had lost two employees, leaving it with a three-person staff that includes herself.

“We’re kind of working like crazy,” she said.

Another Traverse City business, Cultured Kombucha Co., has used grant funds to adapt its taproom and sales to meet consumer safety standards. They have built a structure to house a cooler that provides taproom products through a “contactless shopping opportunity,” and have also reconfigured/reinstalled the taproom that had to be gutted entirely for social distancing requirements, said owner/operator Courtney Lorenz.

She said she received about $3,800 from the Resiliency Fund, money that’s helped the company pivot its taproom service and reopen to the community in a safe manner. The taproom was slated to reopen in late September.

Galbraith said grant applications are evaluated in each county by teams of people who know the community, such as local chamber board members and SCORE counselors. Criteria include how businesses have been negatively impacted by the pandemic, if they are open or plan to reopen quickly upon state permission, their ability to meet or exceed Centers for Disease Control standards for safety to avoid the spread of COVID-19, and readiness to adapt to changing demand and business environment.

Adapting has been the case at Leelanau Books, where doing crafts and bringing books to life for children has been part of the Leland store’s experiential mission.

In past summers, daily two-hour storytelling sessions would feature costumed characters including mermaids, pirates and fairies, often drawing 30 to 40 people. Children could also get face paint, hair coloring or manicures to correspond with a tale.

But this summer, social distancing, smaller gatherings and reduced personal contact were in practice to keep altered activities flowing, aided by $2,500 from the Resiliency Fund.

Story time became a themed, daylong opportunity in an outdoor setting with scenic backdrops, props and corresponding packaged costumes available for purchase, all made possible by the grant money. The costume kits include tattoos, sticker gems and colored hair extensions to be applied by the family, replacing close-contact services.

Manager Paula Alflen, the store’s sole full time employee, said it was important to try to find a way to continue bringing the fairytale world to children and their families, with large gatherings and close contact with staff “fairytale technicians” no longer possible.

“We’re still trying to offer that option of the special fairy tale. Some of the kids put (the costume) on right here, and get their picture taken with the backdrop,” she said.

The grant also helped purchase carpet squares upon which children could sit six feet apart at story time, and a tent providing extra space for storytelling or crafting, in which children make their own souvenirs.

Dealing with and adapting to the pandemic, Alflen said, the store hasn’t “really missed a beat.” And that’s resonated with patrons.

“Families are just really grateful that they’re able to have a fairly normal experience with their kids,” she said.

Amy Lane is a freelance journalist and former reporter for Crain’s Detroit Business, where she covered business, state government, energy and utilities for nearly 25 years.