Business on the brink: Dan Dagg: The people I had to lay off are friends

Most local businesses are suffering these days, and many will close permanently as a result of the COVID-19 lockdowns. These businesses are run by your friends and neighbours, and their loss would change Greater Victoria. We have asked local business people to describe what they are facing. Remember — for every story told in these pages, there are a thousand more.

A commentary by the president of H2 Accelerator, formerly Hothouse Marketing.


I’m not one to write letters, so when I find myself doing so, I know that something big is up. And I believe that is the understatement of the decade … if not the century.

It’s funny how it feels like it was all so distant and moving slowly just four weeks ago. I remember getting my first sense that this was going to be bigger than we all thought while attending the Tourism Industry of B.C. conference here in Victoria March 4-6. Some people weren’t shaking hands and we saw presentations showing declining air travel and a general softening of the market.

The following week, we began to see campaigns cancelled or postponed from the tourism destinations and hospitality businesses we work for. For a bit, we tried to work with our clients to pivot and chase the shorter-haul business.

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But as our understanding of COVID-19’s impact and devastation spread, it wasn’t long before we realized that, for the greater good, we needed to stop.

We needed to stop coming to work in the office. We needed to encourage our clients to stop trying to do anything that could potentially endanger people and fuel the spread of this horrific virus.

The next week, we saw a 66% decline in our revenue projections and almost every call was from a client needing to cancel work and post COVID-19 updates on their websites.

So now what?

I have 20 employees. I have to close my office to protect everyone, with very little money coming in.

I have to cut costs. I have no choice but to lay off six people, as we in senior management take pay cuts.

It sucks.

And I have to say that laying off a person is the most painful thing you will ever do in business. And it’s worse when it is no fault of theirs or anyone else. Who goes? Those who are financially more secure? The newest? The most expensive?

I laid off six people in one day. Some people I have worked with for more than 20 years. They are friends and family to me. And I can say without shame or embarrassment that I cried that night. It was the worst day in my 30-year career.

So where are we now? My remaining team meets, virtually, every morning and reviews the work. Some staff are busy, some have little or nothing to do. I can sense and see the palpable fear in everyone’s eyes and voice. Fear over job security, financial security, their personal health and safety, and that of their families whom they can’t be with physically.

I don’t sleep much. Here’s what keeps me up:

While the government has moved to provide support to many people with respect to EI, COVID-19 emergency relief and residential rent protection, it is probably too little and too slow for business.

Offering me a tax deferral doesn’t help me, it only delays bills that I won’t be able to afford later. Where and when are we going to find that money?

I am paying rent on 2,500 square feet of office space that is sitting empty. (I feel lucky that I am not a retail location that has zero revenue coming in and extremely high rent.)

Small business needs federal, provincial or municipal rent support. Please create a fund or tax breaks for landlords to provide rent relief, not deferral. We are in enough trouble and the bottom line is that you can’t get blood from a stone. The wage subsidy is nice, but I still have salaries to pay without enough revenue coming in. Moreover, at this point, it is still just a promise. I have to have faith that it will be implemented fairly and fast — which isn’t happening.

I have no idea when I will know for sure that I have qualified, and it will be six to eight weeks before I see any money. I have to pay my people twice a month.

I worry about my clients’ ability to survive this. This causes several concerns. First, I care about them, and, second, will they be able to pay their bills? If 25% of my clients go out of business and can’t pay their bills, I can’t pay mine and I follow suit.

I never would have thought, four weeks ago, that I would be working from home, cutting my own hair and making my own hand sanitizer.

That a big adventure would be a walk around the neighbourhood.

Ironically, COVID-19 has brought us many gifts. It has forced us to think of and embrace what matters … our family, friends, health and time on Earth. We are enjoying parks and board games, music, hobbies and crafts.

Conversely, it has brought about death, financial ruin, fear and isolation.

What matters in my view is the long game. We protect and embrace our families, but we also protect and preserve that which makes it all possible — good business.

The people who own and run the businesses that employ the people who we are trying to protect. The businesses that donate more to charity and pay more taxes to keep our parks clean and our community centres open.

And that will give you a good haircut when this all subsides.

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