'Hanging on by a thread': Faces of the cancelled economy

Lea-Ann Suthern's normally buzzing hair dressing salon in Sydney's Newtown is half empty and the phone keeps on ringing with more customers cancelling because they are worried about coronavirus.

"We are a close contact business, people know that," Suthern says. "We can't work from home, that is the biggest thing. People are saying work from home, we just can't do that. We are working here or we are not working."

Bookings are down by 40 per cent at Suthern's salon and her voice cracks as she talks about them falling further.

Lea-Ann Suthern, owner of Toni & Guy Newtown, has seen customer numbers fall dramatically.Credit: Steven Siewert

"Like any small business we are very fragile economically, we operate week to week," Suthern says. "We have to pay rent, we have stock suppliers, our overheads are very high because we are a labour based business. Our staff are young people, they are renting and are in a precarious position themselves."

Suthern is one of hundreds of thousands of Australians in the cancelled economy, small business owners whose livelihood and that of those they employ is at risk as a result of coronavirus.

The government and banks are scrambling to help the sector. The government last week announced a $17 billion stimulus package that included instant asset write-offs and up to $25,000 in payments to small and mid-size businesses while banks are giving small businesses a six month reprieve from loan repayments.

Despite these measures small businesses are reeling. The hospitality sector is expected to be one of the hardest hit as it experiences a huge drop in patronage.

Kirsty Chiaplias is the owner of Babajan Eatery and has already decided to close one outlet. Credit: Paul Jeffers

Babajan Eatery in Melbourne's Carlton North normally turns over around $1 million a year but trade has already fallen by about 30 per cent in the past week prompting owner Kirsty Chiaplias to close one of her outlets this weekend and focus on her main cafe.

"It was busy for takeaway this morning as people come out to get what they need then go home to self isolate," Chiaplias says. "But now we have five staff and five customers for what would be the lunch rush."

Chiaplias is desperately trying to keep her business afloat and her 14 staff employed by offering delivery and driving the orders around herself.

Kirsty Chiaplias is now delivering food to customers herself. Credit: Paul Jeffers

"I am just going to try my best to keep everyone working," Chiaplias says.

"I think this week is going to be the teller for what happens. We are doing meals for the Red Cross from this afternoon because I want to keep the momentum up in the kitchen and there are going to be other people suffering more than me."

Casey Castro is offering live streaming at her yoga studio. Credit: Steven Siewert

At a yoga class in Bondi last week at Sydney Yoga Collective for the first time ever not a single person turned up.

"We were growing exponentially," owner Casey Castro says. "This week after the constant stream of government announcements it has put everyone in a state of fear and our attendance has just diminished."

Castro is offering online streaming of classes to members in a bid to enable them to keep practising and to keep the studio's yoga teachers in work.

"Yoga teachers get paid by class so if there are no classes they don't get paid," she says. "I still have the same overheads with rent, insurance, all those costs don't go away. I want to continue to stay in business and come out the other side."

Kathryn Anderson is the owner of Viva Physiotherapy which has seen a 40 per cent drop in business.

Kathryn Anderson, the owner of Viva Physiotherapy in Melbourne's central business district, is also looking to pivot her business online offering remote consultations and ergonomic assessments by video link.

"There's been a big reduction in the people travelling in the city to work, many CBD businesses are asking their workforce to work from home so normal people who would come in for classes or for an appointment are not really around," she says.

Viva Physiotherapy employs nine staff and turned over under $1 million last year but Anderson says business has fallen by about 40 per cent already.

She is determined to do everything she can to keep her staff employed, particularly the casuals.

"The world is changing rapidly so I’m just trying to minimise the impact on me and my employees," she says. "There is an opportunity for us as a society to rise up and say 'Let's do what is maybe not best financially, but what keeps our community together'."

Northcote bookshop owner Leesa Lambert is also focused on keeping her staff employed. Customers are still coming into Neighbourhood Books while they can but patronage is waning.

"Our strategy has been to run events to bring people into our spaces, that has been a critical part of our business plan, but we have had to stop that," she says.

Lambert employs six staff and turns over around $1 million a year normally but says turnover has dropped by 20 per cent already.

"If we have to close our doors obviously our retail staff couldn't work from home which would be heartbreaking as they are like family to us," she says. "We have fixed expenses like rent and a business loan so we'd probably have to close down."

Leesa Lambert has started doing deliveries by bike and van at Neighbourhood Books. Credit: Justin McManus

Lambert is trying to keep customers on board and her staff employed by offering free delivery of books in the local area by bike or van.

"It's something we have always talked about doing so now is the time to do it," she says.

But travel agent Belinda Farrelly who owns 40 year old family business APP International doesn't have anywhere to pivot her business to with no new bookings coming in.

"I have four women who work for me," she says. "I thought it was bad and you think it can't get worse and today it got worse."

Farrelly has been working 15 hour days up until 2am trying to organise to get her clients home from overseas.

"I haven't really slept for a week," she says. "Some customers are so appreciative they have been dropping around meals as they know my kids are probably living on McDonald's but we have been getting abuse as well."

Farrelly says she is not taking any income from the business until 1 July at the earliest.

"We will only survive because we own our premises, we will be hanging on by a thread," she says. "All my staff work on commission, they are not going to have any sales, if anything they will lose money as they will be giving money back to clients."

Hairdresser Suthern says she is trying to still find humour in what is a grim situation.

"I swapped two rolls of toilet paper for a Google review yesterday," she says. "We are trying to keep our spirits up."

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