Opening a business on a budget during COVID-19

Kate and Kelly, owners of Northeast Hair & Co. in Minneapolis, kept their newly-opened salon afloat during COVID-19 closures by adapting creative business practices.

When businesses were forced to close early in the pandemic, the future of many small, family-owned operations were suddenly up in the air. Retail stores were able to move sales online and restaurants could order takeout, but it was especially difficult for businesses like spas and salons, as they weren’t able to offer any services to their clients.

When new salon owners Kate and Kelly had to close down Northeast Hair & Co., their options for bringing in revenue were limited. However, implementing new business practices and getting scrappy with the resources they had helped them stay in business while their doors were closed.

Kate and Kelly opened Northeast Hair & Co. quickly and efficiently — they began booking appointments at the salon just six weeks after finding the space in Northeast Minneapolis. “We were very busy — it was just the two of us working, and our clients were really excited to see the new space,” Kelly said. “We had our grand opening party on February 29, and we were working behind the chair, but still renovating.” Instead of hiring builders and designers, Kate, Kelly and members of their family designed the space, painted and built and installed all furniture and fixtures themselves. “We were able to do it at a very low cost using a small business loan and doing all the construction ourselves,” Kate said. Business was doing well right off the bat, but four weeks later, they were forced to close their doors due to COVID-19.

Even though the sisters saved money by DIY-ing some large and small projects, they were still dependent on the revenue Northeast Hair & Co. would normally have been making. In order to make ends meet during the months they were closed, they took out a small business loan to cover business expenses. “Since we didn’t have much [revenue built up], we didn’t have a nest egg to go off of,” Kelly said. “We budgeted outside of the business to make ends meet and used the small business loan to cover the cost of equipment.” Kate and Kelly opted to take out a smaller loan, so they didn’t have to worry about repayment for more than a few years.

When it looked like they would be closed for a while, Kate and Kelly channeled their creativity and client service skills to create a system that helped them bring in more money, retain their clients and keep their business flourishing. "We ended up selling gift cards and products over the phone and letting people prepay for hair services," Kate said. “There were a few times where we were on the phone [making sales] eight hours a day.”

Communication was key — Kate and Kelly wanted to ensure their clients returned to them when Northeast Hair & Co. could open back up. “We kept in touch with the clients through the entire 10 weeks. We asked how they were doing, and we had good communication as we got them back on the books.” Now, Northeast Hair & Co. is open, and business is thriving again. Since reopening, Kate and Kelly were able to bring on two new stylists and book even more clients than before.

Starting a business during unprecedented times might seem tough, but Kate and Kelly’s journey proves it’s not impossible. “Get organized. Hustle. It’s obviously not easy, but there are always options,” Kate said. “People who are just starting should know that there are ways to open a business without spending too much.”

Continue reading more stories about how small business owners navigated unprecedented times.