The Cut is asking readers to share what they’re doing with their money — or the lack of it — in the midst of an unprecedented crisis. This week, a 34-year-old facialist in Brooklyn, who was relieved to close her business but has now maxed out her credit and lost all her income.
I started my business seven years ago as a solo practitioner. I slowly grew it, and four years ago I opened a storefront in Williamsburg. Before the pandemic, I had seven employees. When the coronavirus hit and we were forced to shut down, I had to lay everyone off. I couldn’t pay them, and I knew it would be better for them to be able to collect unemployment. It was heartbreaking. Everything I’d worked for in my life went down the drain in front of my eyes overnight. I went on autopilot, making phone calls to shut off the internet, all that stuff. When it was all done, I felt like someone had knocked the wind out of me.
Then it was the weirdest thing: After a couple of days, I started to feel this strange relief. Suddenly, my phone was quiet. None of my employees or clients were texting me. It was great.
I don’t want to say that any of this was a good thing, obviously. But in a fucked-up way, I’ll admit that I’m glad I was forced to close. I don’t miss my business at all. I hadn’t had a real day off in years. Now I’ve had three months off and I feel free.
But at the same time, I’m totally broke and facing financial doom. And it’s not like I’ve been on vacation — I’ve been trying to navigate business loans and unemployment. But I’m only responsible for myself, not other people, and that’s a big weight off my shoulders.
Running a business is like trying to keep a baby happy. It cost about $35,000 a month just for the basics — to run payroll, to pay for the skin-care products we use, to pay rent, to pay unemployment insurance, and to pay workers’ comp and disability. I was constantly worried about messing it up. The psychological effects of entrepreneurship, and how lonely it can be, are real. As wonderful as it is to build something of your own, it’s isolating to be in charge. Your employees are not your co-workers. They gossip about you because you’re the boss, and they’ll talk shit about you if they’re unhappy about something. And you have to suck it up and act like it didn’t hurt your feelings. I’m a sensitive person, and it wasn’t something that came naturally to me.
Still, the business was successful, and when you’re doing well, everyone’s like, “Make it bigger!” So I opened a second location at the beginning of 2019. That’s when I started to get really exhausted. And it showed. Our revenue dropped by 20 percent that year, and I think it’s because I was stretched too thin. I was not able to be the boss that I needed to be, and give employees my best training, and create the infrastructure that needed to be there. We had some staff turnover. Finally, I was like, I can’t do this anymore, and I closed the second location in December. As soon as we did, our business at the original location was back up 20 percent from the previous year. So, something about expanding just didn’t work for me.
Even though things were going well in January and February, I’m still in a lot of debt from opening the second location. In 2019, I started putting all of my personal expenses on my credit card so that I could put more cash into the business — which is bad timing now that I’m not working. My AmEx has a $65,000 limit, and it’s completely maxed out. Now AmEx is trying to bill me for like $9,000, and I’m delinquent on my payments, because I don’t have the money. It’s scary. I don’t know what to do, to be honest.
For a small business like mine, a slow week is a big deal, let alone being closed for months. We didn’t have a cushion. When we closed in March, I think we had about $10,000 in our business account. Any extra money was immediately eaten up by the last of our bills and the next month’s rent. I applied for an Economic Injury Disaster Loan, and they gave me $7,000. I used it to pay my rent for my apartment, which is $2,000 a month, and for my storefront, which is $3,500, and now it’s gone. I told my storefront landlord that he wasn’t going to get a rent payment for May and that he could take my security deposit. The lease is up now, in June, and I’m moving out. He was nice about it. I think he understands that there’s nothing I can do.
Back when things were normal, I paid myself a salary of about $4,000 a month, and then at the end of the month, depending on how the business was doing, I would give myself a “bonus” — usually about $1,000. But I live pretty humbly. About half my salary would go to my rent, and then I’d spend most of the rest on food. I love great restaurants, and I would go out about three nights a week. Drinks and dinner add up — like $100 a night. Occasionally, I’d take a trip to visit friends in L.A., but it was always a coach ticket, nothing fancy. I never kept a budget, but my living expenses were always under $5,000 a month.
Obviously, I’m not going out right now, so I’m sure I’m spending less. But frankly it’s hard to keep track. I’ve still been buying the occasional to-go drink and bottle of wine. I still do Sunbasket to cook at home. I’ll pay $10 or $15 to do a workout class online because I’m not going to SoulCycle or Pilates anymore.
Things are getting really tight, though. I have less than $1,000 in my checking account right now. I tried to apply for unemployment months ago, but I couldn’t get through to anyone on the phone — it was busy whenever I called. I kept calling for weeks, then gave up for a while, and then was finally able to file officially at the end of May. I haven’t received any payments yet. I think I’m eligible for almost $1,000 a week, which would really help me out. As of right now, I’m not sure how I’m going to make rent without it. And I can’t apply for a new credit card because my other one is maxed out.
I do have moments of panic. But it’s also hard to care, or to take money seriously when you’ve seen it come and go like I have. To be running a profitable business one minute and have less than $1,000 in your checking account the next, all because of a germ — it’s like, What’s the point? It’s out of my control.
When I do reopen, I’m just going to have a private practice again and see clients one-on-one in my apartment. It seems safer to stay small. I don’t want to reopen and hire people back and then have to lay them off again if there’s a second wave of infections. I do think I’ll be fine eventually. But maybe I’m also just naïve.