How NJ small businesses are tackling new challenges post-pandemic
Mandy Grant, former owner of Juluka Yoga in Hillsdale, views 2020 as the worst year the studio ever faced. The pandemic brought the business she founded and built for about 15 years within inches of permanently closing. At a time when many individually owned yoga studios shut down, Grant rented out her home and moved into a van to keep the business alive.
For many small-business owners in North Jersey and beyond, a passion for their work and dedication to their customers motivates them to make sacrifices.
“My life would be completely different if it wasn’t for yoga,” Grant said. “It saved my soul. I can honestly say that without any question. … When you have a studio that is so open and … welcoming, and inclusive, it's a little refuge for many, many people.”
Grant, who now runs yoga hiking retreats around the globe, transferred ownership of Juluka Yoga to instructor Lisa Cleaver in November 2021. The studio was then rebranded as Release Yoga.
Like many other small businesses in North Jersey, Release Yoga has financially recovered from the pandemic and has seen growth. However, small businesses still face challenges such as labor shortages and an increase in online shopping, in addition to new obstacles like inflation.
According to Marc Kalan, an associate professor at Rutgers Business School Newark and New Brunswick, although the economy is currently strong, consumers are hesitant to spend money on non-necessities that many small businesses sell, because of inflation. While some local businesses, especially those in food and hospitality, appear to be doing well, others have shut down permanently.
Small businesses have found strength despite these difficulties through engaging with their communities, promoting services on social media and maintaining a unique edge over large competitors and online retailers.
Labor shortages
Many small businesses have been unable to find help, due to a combination of factors including low unemployment, immigration policies, and a smaller student labor pool because of a push for students to work at corporate internships, Kalan said. The shortage is strongly affecting businesses such as restaurants and hotels that have a large need for varied types of labor to function, he said.
"We have an incredibly low level of unemployment, the lowest that I can remember ever," Kalan said. "Finding appropriate help in so many small businesses that might need another floor person, or stock person, or delivery person, that's a big, big challenge."
He said small businesses are "challenged now to offer higher wages or other benefits. That comes out of the pockets of the small-business owner ... putting pressure on their pricing strategies and their ability to deliver products and solutions at a cost-appropriate manner."
A shortage of hairstylists due to the pandemic has hurt Cookie Cutters, a children’s hair salon in Mahwah, since 2020. Jennifer Pirot opened the Mahwah Cookie Cutters location in 2018; though it is part of a larger franchise, it is individually owned and operated by Pirot.
When the pandemic hit, Pirot was not yet able to cover operating costs because her business was still growing.
The salon industry “was one of the most severely affected ones … because you're so close in people's personal space,” she said.
Stylists nationwide switched jobs after realizing how quickly an event like the pandemic could leave them out of work.
“Older stylists are like, ‘I don't want to be around the germs anymore. It stresses me out,’” Pirot said. “Younger ones are like, ‘What am I going to do if it shuts down again and I don't have a paycheck?’"
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Her business was able to survive thanks to government relief loans for small businesses and has now financially recovered. However, she has seen little improvement in the labor shortage. Kalan expects the shortage to continue for most types of small businesses.
Despite increasing everyone’s pay post-COVID and working harder than ever before to hire new staff, “I’ve only brought two new stylists in since COVID ended, and that’s not great,” Pirot said.
Nonetheless, for Pirot, running the business has begun to feel a lot more like it was pre-pandemic. Although some changes have been made, such as the addition of more robust cleaning procedures, “servicing the clients feels the same,” she said.
Unique edge over competitors
Art Kieres fell in love with collecting old books when he was 13. He opened Bergen Book Studio in Hillsdale in October 2022 because of his passion for reading. Though starting the business was a rocky road, the small bookstore has seen growth each week.
Before Bergen Book Studio, Kieres owned a furniture business for 18 years. Compared with when he founded that business 20 years ago, he finds it now much harder to be noticed by consumers.
“There’s so much stuff out there … vying for people’s attention,” he said. “Once they come through the door once, they’ll come back. But it’s hard. There are thousands of book dealers in America, online especially. … You need to stand out in a way that’s going to compel people to come back time and again.”
The pandemic, in part, caused a significant rise in online shopping that contributed to a decrease in small-business customers, Kieres said. However, things are looking up.
“Bookstores are doing great nationally right now,” Kieres said. “Last year, the [American Booksellers Association] just put out numbers that for every one store that closed, three stores opened. ... People during the pandemic shifted all their buying basically to online. And so it's been not a struggle, but it's been kind of a process to get people to come back to brick and mortar.”
To stand out among large retailers like Barnes & Noble and online sellers, Bergen Book Studio is committed to carrying “the highlights of the past 2,000 years,” Kieres said. It separates itself from the crowd by offering a vast catalog of books including many older titles, a large selection of used books, and special orders of books upon customer request.
“We have seven first editions of Charles Dickens; we have first editions of Hemingway; we have books going back to 1522,” Kieres said. “So we’ve got just thousands of books that the other stores just wouldn’t take. It’s not their expertise. For serious collectors, we’re a better resource than a lot of other stores.”
Kalan, of Rutgers, noted that between the winter of 2021-2022 and now, online shopping saw significant growth. He expects that the digital marketplace will continue to expand in the long term. However, he believes that there will still be a place for small businesses, especially in New Jersey.
About "three out of four purchases are still being made in a more traditional manner," Kalan said. "I still believe it's going to be the mainstay and the backbone of our economy here in New Jersey. And we are an economy that's very based on consumers. ... We have the highest population concentration of any state in America."
"Shopping is the New Jersey state sport," Kalan said. "People here like to go to malls; they like to go to outdoor festivals and shop; they like to go to those types of places. And during the pandemic that was severely, severely impacted. I think, now, people are reacting very positively and are actively trying to enjoy those things a lot more."
Small-business owners must study the market
Forbes reported that nearly half of all small businesses fail because of a lack of market demand. This can also occur when business owners are unable to reach consumers where there is demand.
“Study the market. Make sure the area’s going to sustain the business,” said Anthony Guggino, owner of The Game Zone, a video game store in Hillsdale. “This is a niche market. It’s not groceries. … If there's not enough people that are going to want this thing, then it’s going to fail.”
North Jersey’s high population density helps small businesses that cater to niche markets through increasing the odds that they’ll reach their target audience. However, this does not guarantee demand.
“Oftentimes, I see people open up specifically stores like this. I mean, I know a guy who just opened up in Oak Ridge, New Jersey, and I tried to reach out to him today,” Guggino said. “I don't think he's still in business. I don't think it lasted a year.”
Where there is a market, small-business owners have made efforts to reach consumers through social media marketing, community outreach and designing their business with a target audience in mind.
Kalan advised that small businesses should be careful about raising prices too quickly, as inflation is currently down and the economy is strong. He recommended that stores manage inventory in a way that is consistent with the level of business they receive. He also suggested that small businesses should identify new areas consumers are excited about and focus on a defined need in the marketplace.
For Pirot, appealing to her business’s target audience, children, has helped build a customer base. Cookie Cutters was built with an indoor playset, including a slide. When the children get their hair cut, they have the option to sit in decorative seats representing firetrucks or airplanes.
“We want you to come in, get a quick, easy, painless haircut, and then, quite frankly, get out, right?” Pirot said. “Because kids have a short attention span. And then they don't all love haircuts.”
Social media
Social media and maintaining an online presence has become incredibly important to small-business success, Kalan said. This is because many customers will identify a problem or need that they have and look online for solutions, which include products that many small businesses offer.
"If you don't have presence on social media, you're at a significant disadvantage," Kalan said.
Twenty years ago, when Kieres first started his furniture business, he didn’t think that any kind of online presence would be helpful. Now, he feels that using social media to market a small business is essential to reaching customers.
“The biggest difference” between now and 20 years ago, Kieres said, “is the amount of time spent on online things and Instagram posts, on Facebook posts, emails. Again, just all those digital marketing techniques. While a lot of them are sort of low-cost, they also require constant attention, and you always have to be thinking about what to take pictures of and what to post and what not.”
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Cleaver, the owner of Release Yoga, emphasized that social media is crucial for reaching potential customers but also for building a sense of community.
“I always try to communicate with our population, with our community,” Cleaver said. “We send out bi-monthly emails to keep people up to date. I'm always posting on Instagram … things about the studio, posting special classes and workshops … We have our website so that people can feel that they're connected to the community.”
Neighborhood connections
Some small businesses have used their resources to serve their local towns and at the same time form communities of their own.
Part of Bergen Book Studio’s mission is to encourage children to read. It has provided local public schools with books, other reading materials and summer reading lists.
The book studio also hosts a monthly book club on weekend evenings to let book lovers discuss their favorites and exciting new releases.
Release Yoga has become a place for yogis to find friendships and strength in a community of like-minded people.
“People talk, people go out after classes,” Cleaver said. "We do a lot of community events. ... Every November I do a big event for the entire community where we have hundreds of people come and you can practice all day long. … It's not a gym, where you just walk in and you do your workout, then you leave. They're coming in for support. They're coming in for guidance. They're coming in for friendships.”
Kalan strongly believes that the shopping community in New Jersey will continue to support small businesses.
"We as a shopping community here in New Jersey like to support our local businesses," Kalan said. "And I do know for a fact many of my peers and neighbors go out of their way to support local businesses because we know that keeps our community vital and thriving."
Kalan suggested that small businesses in some areas of New Jersey can expect to do well this summer due to the Garden State's thriving travel industry.
"We have an enormous shoreline, relative to the size of our state. It's incredibly long," Kalan said. "So it will probably do reasonably well on that Jersey Shore or up into the mountains of Morris, or Warren, or ... Sussex County. And I think that the travelers will help to support those types of businesses. ... People after being home for several years are very, very anxious to get out and enjoy the world again."
This article originally appeared on NorthJersey.com: NJ small businesses maneuver amid inflation, labor shortages
