For one business owner, painful job cuts only way to save her company

The coronavirus is a devastating blow for hundreds of thousands of restaurants, stores and other small businesses across the U.S., which find themselves suddenly cut off from their customers as Americans seek refuge from the lethal pandemic. Molly Moon, who owns a namesake chain of ice cream shops in the Seattle, Washington, area — Molly Moon's Homemade Ice Cream — spoke with CBS MoneyWatch about how she and her business are holding up during the public health crisis. The interview has been edited for length and clarity.

CBS MoneyWatch: How has your business been affected by the coronavirus outbreak?

Molly Moon: We totally changed the way that we operate. On March 16 we laid off 75 people and tried a different service model and had one or two people in each shop scooping ice cream and really limited our hours. We are usually open from 11 a.m. to 11 p.m. and we do a lot of business late at night and after dinner, and we moved to a model where we were open from 2 p.m. to 9 p.m. That allowed our managers to work one eight-hour shift and do the whole day by themselves. We asked them to take a 20% pay cut, and I asked my executive team to take a 50% pay cut. They make between $70,000 and $120,000 depending on who they are. That's what things looked like last week. 

Have those changes helped?

We tried to operate that way for a week, and by Sunday we felt our customers were not following social-distancing guidelines. People were standing close together, they were going through a single doorway at the same time. We really wanted to do our part to slow the spread of the virus and that meant not encouraging people to come. So on March 23, I closed all eight of our shops for two weeks and laid more people off.

How many of your workers have you had to lay off since all of this began? 

I went from employing 120 people to employing maybe 12. We laid off everyone who works in the front-of-house. All our shift leaders and shop managers. We now have three chefs, one ice cream maker, one delivery driver and my leadership team.

Any idea when you might be able reopen?

We will be closed for two weeks, and we put out a pretty strong message on social media and on our website telling people to stay home and save lives. We are trying to stay home ourselves and give as many employees as possible the opportunity to stay home. Employees who are working are going to the kitchen by themselves, making ice cream, sanitizing before and after they are there, and they are working completely alone. 

Are you doing any business at all?

Our chefs are making pints to sell to grocery stores. I [recently] just got my first order for $8,500 worth of pints. Two local grocery store chains — PCC co-op and Metropolitan Market — will have pints within 10 days. They will pay us in 30 days. I think it's important for every business that can to stay home for two weeks and really slow this down. We have this tentative plan where when we reopen we will only serve pints, fresh waffle cones and portioned toppings into to-go containers to encourage people not to hang out in public but to go and eat this at home.

Had you previously thought of selling your ice cream to groceries?

I never wanted to be in grocery stores. I love the multigenerational community gathering place role that an ice cream shop plays in a neighborhood. That's why I am in this business. But I know people are going to be really happy when we announce that our pints are in grocery stores!

How is what you're doing now different from operating walk-in shops? 

I am used to running a $7.9 million company with a team of operators and marketing people around me. That is how we are built. I don't even know if I have the right skills to run a small ice cream grocery business.

Are you still paying rent?

No way. I don't have any money. My [chief financial officer] said that, after payroll, we have $450 dollars in our corporate account. And that's from a company that did $7.9 million sales last year. I have no income, and my husband — who owns a coffee shop — has no income. 

I told my landlord that I can't pay this month's rent, and I probably can't pay next month's, either. One said I can start amortizing the rent payments I have missed into the lifetimes of the leases. 

Some have said they'll get back to me with what they think of that idea — some haven't responded. Nobody has flat-out said "no" because the governor and mayor said they can't evict us. 

Have you applied for any government grants, loans or other kinds of relief?

We have applied for the [Small Business Administration] loan through the federal disaster designation, and we have been in really good contact with our banker. I have good credit. I have a successful, growing business, but they can only do so much. I am in the middle of building a $700,000 dollar ice cream shop — it's our biggest shop ever with a huge on-view kitchen so people can see from the street us making everything. Construction on that is on hold because construction on ice cream shops is not deemed essential. But I still got a bill for the construction that has happened over the past two weeks for more than $100,000.

I think if I can get short-term cash help that I don't need to pay back, and if business can go back to normal at some point, and the company is profitable enough to take on a good bit of debt, I'll pay it back over time. The question is what do we do in the meantime? 

Are you still providing health care for employees who have been laid off?

I pay 100% of health care premiums for all employees who work 20 hours or more. My health care bill in April will be $31,000, and I will do anything so that not one of my employees goes without health care.

That's my monthly health insurance premium and I am going to pay it. My kids' college fund has $23,000 in it and I am looking at that. I hope I don't have to do that, but I have employees that have kids. They can't not have health insurance. 

What are you living off of right now?

My husband took money out of the stock market when Trump got elected. It's not very much — it will last us about 10 months. 

This is obviously a very difficult time for you and your family. How are you handling things emotionally?

It is definitely taking a toll. I'm getting migraines and weird twitches on the right side of my body! But I have some really, really good people in this with me. And our customers have been amazing. We've done like $50,000 in online sales over the last few days.