How one small business owner kept all his employees with revenue down 70%
How one small business owner kept all his employees with revenue down 70%
The economic relief plan President-elect Joe Biden unveiled last week includes $15 billion in grants and $35 billion in low-interest loans for struggling small businesses. “Marketplace’s” Reema Khrais checked in with Drew Dalzell, who owns Diablo Sound, a sound-design company based in Los Angeles that specializes in live events, like theme parks and haunted houses. Khrais previously talked with him in March on an episode of the podcast “This Is Uncomfortable.” The following is an edited transcript of their conversation.
Reema Khrais: So I want to start with a big picture here. How is your business? How are things going these days compared to when we last talked at the start of the pandemic?
Drew Dalzell: Well, we’re still standing. I just wanted to make it through 2020, and we did. I have all of my-full time employees still with me, which is huge. But it’s been a rough year. You know, we made a scant percentage of what we made the year before and the year before that, but but we’re all still standing and the business is still here.
Khrais: Yeah, I mean, that’s, that’s huge. I remember you told me at the beginning of the pandemic, you’re like, my goal here is just to survive, like to make it on the other side of this thing. Have you, as a company, have you all had to take on some debt?
Dalzell: Yeah, I mean, the company’s carrying a much higher debt load than it was. One of the assistance programs that I got is a large 30-year loan through the [Small Business Administration], which is good, it’s low interest. But it’s still … I will exit all of this with a very different debt encumbrance picture for the business than I started.
Khrais: Do you feel comfortable sharing numbers?
Dalzell: It’s more than half a million in new debt, based on all this.
Khrais: Yeah. How does that feel?
Dalzell: The individual part of me looks at that number and goes, “Oh, my gosh, that’s huge.” If I let myself calm down and look at the business in a healthy year, it’s not unreasonable. So we’ll tackle it. And we’ve eliminated some other things to prioritize being able to keep my staff.
Khrais: Yeah, it sounds like one of your biggest priorities is keeping your staff. I know it’s a relatively small company, but can you tell me a little bit about that decision making? Why was it so important for you to make sure that that was the No. 1 priority?
Dalzell: My employees are my business. It’s not the equipment, it’s not the vehicles, it’s not the name. It’s none of that. It’s my employees. So that’s a big piece of it. The other one is, I just don’t have it in me to lay someone off in the middle of this knowing that I’m not just taking away their money, I’m also taking away their health care. If the ship is going to go down, it’s going to go down trying with my last breath to make sure that people that are part of this business stay afloat.
Khrais: Yeah, I remember you furloughed your employees, and then you were able to bring them back on when Congress came through with that first stimulus package. And then — I don’t have to tell you this — we know that it took months of haggling before Congress passed its second relief package. Had they passed it sooner, I mean, how would your business look different today?
Dalzell: Had they passed it sooner, I wouldn’t have used all of the loan that I took out. Instead, that’s a big part of how we rode this out. And now that needle’s almost on empty again. But the next round is about to come, so we’re keeping our fingers crossed. And we did pick up a few small projects, nothing like we would have. I think we made about 30% of what we normally make in a year. So not even enough to completely cover payroll. But you know, enough to keep us afloat and to help here and there and to help with rent payments and things like that.
Khrais: Yeah. Well, I remember last year, you said something when we talked that really stuck with me. After you laid off, or furloughed, your employees, you said, “You know, I know intellectually this is all beyond my control. But I still can’t help but feel like I failed them.” Like you didn’t do your part of the job. And I’m curious, you know, how you feel many months later, now half a million dollars in debt, with all of your employees back on payroll? How are you feeling as the owner of your small business, as the one steering this ship?
Dalzell: I think I feel better. You know, my friends and my employees are good about reminding me that “Look, we’re still here, and apart from a one-month furlough, you found a way to pay us through all of this.” So I feel good about that. I don’t regret taking on that amount of debt because I think it means we’re going to survive it, and I’m going to have good people and hopefully a thriving business on the other side of this once people are able to go back and be entertained.
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