Buenos Aires, Argentina – On a Monday in March before the president orders mass closings of businesses to contain the spread of COVID-19, Eugenia Santome gathered her 20 employees at BeWe Home, a small company that produces picture frames, boxes and other items. decoration for the home made of recycled wood.
Anticipating that it was only a matter of time before the pandemic restrictions sweeping other parts of the globe find their way to Argentina, Santome told his staff to work as if they didn’t there was no tomorrow.
A few days later, she pooled all the money she had in the family business she had founded and summoned her staff again.
“I said, ‘Take this money. It’s not all your paycheck, but take that money and pay nothing. Just use it to buy food, ”Santome told Al Jazeera. “They looked at me without really understanding. Even the people at the bank didn’t understand me.
Argentine President Alberto Fernandez ordered a nationwide lockdown on March 19. Although restrictions gradually eased, the lockdown remained in place for more than seven months, dealing a blow to an economy already plagued by chronically high inflation, a sinking currency and growing unemployment and poverty.
At the end of 2019, more than 35% of Argentines were living below the poverty line, according to official statistics. That number has now grown to over 40 percent.
Unemployment rose to 13.1% in the second quarter, fueled in part by the thousands of small businesses that closed their doors for good during the pandemic.
The country recorded 3.4 million fewer jobs in the second quarter of 2020 compared to the same quarter of the previous year. Most of these losses were in the informal sector, which is made up largely of jobs that provide no security to workers.
And despite its aggressive lockdown, Argentina – which has a population of 45 million – has recorded a staggering 1.5 million confirmed cases of COVID-19 and more than 42,000 deaths from the disease.
Mettle and creativity
Running a small business is not for the faint of heart, but in Argentina, a country subject to volatile economic fluctuations, a different kind of courage and creativity is needed.
“Really this country is unpredictable and small businesses like us are jugglers because we make decisions without knowing what’s going to happen. We are adventurers, ”said Santome, who runs BeWe Home with her husband and a business partner.
BeWe’s origin story dates back 45 years to Santome’s grandfather, who worked in the maintenance of military drafting tables and as a carpenter in making side furniture. While working in a stationery factory, his father exhibited frames made in his father’s workshop and gained customers.
In this country, you have never had access to soft credit. So when you have a bad season, no one is ready to lend you money. It’s the contrary. They all watch to see when you are going to trip.
Sales increased with the government of the late Nestor Kirchner (2003 – 2007) and the boom in domestic consumption. Santome’s booming frame manufacturing plant began dealing with major retailers Falabella, Easy, Jumbo and Walmart, producing exclusive lines for them at a time when importing from China was difficult to do.
Sales were good, but profitability suffered from rising inflation. President Mauricio Macri took power in 2015. Import barriers have fallen, which in turn has resulted in a loss of business for Santome.
In early 2020, inflation and sky-high interest rates were swallowing up their profits; a 78% annual rate at the bank was the best Santome could find.
“In this country, you have never had access to flexible credit. So when you have a bad season, no one is ready to lend you money. It’s the contrary. They are all watching to see when you are going to trip, ”she explained.
“We had bet everything so that in March with the new government [of Alberto Fernandez], we could restart. Mars has arrived here and the pandemic has arrived, ”added Santome.
The last thing she wanted was to stay still. BeWe Home was able to get back to work 15 days after the lockdown, as it fell under the aegis of “essential” companies that made wooden pallets.
Santome called everyone to place an order for Carrefour, a large French grocery chain. Without knowing when the next order would arrive, and not wanting to use up all its supplies, the factory closed again.
It took a while for government financial aid to materialize, so in those early days of foreclosure, Santome paid salaries using his credit cards to buy his own merchandise.
“We used the income generated by my credit cards to pay the minimum wages possible,” she said. “So we were distributing 3,000 or 4,000 pesos (about $ 50) to our employees.”
The truth is, this country is unpredictable and small businesses like us are jugglers because we make decisions without knowing what’s going to happen. We are adventurers.
So far, everyone in the company has been able to keep their jobs. And BeWe started to improvise. They returned material that they could not afford. They improvised by sourcing more lumber byproducts – like leftover door frames – that were cheaper to create their decor.
“You have to find the products that people have in stock that they want to turn into money,” she says.
Santome also spilled over onto her own shelves for designs she already had and could use. And they have adapted to demand.
BeWe Home was fortunate enough to produce products that made life at home more bearable, and sales increased as people spent more and more time indoors. Suddenly, the items that didn’t matter much before the pandemic were hot items, like breakfast platters.
In the beginning, large customers bought half as much and took longer to pay. But smaller customers, like bazaars, independent home decor stores or family grocery stores, continued to order, in part because it was difficult to source products from other parts of the country.
“We would prefer to have many small clients and personal contact with the owners,” Santome said. “A lot of people were very good to us.”
The pandemic has also changed Santome’s work habits. Instead of spending time on designs or at the office, she’s at the factory, producing holiday-themed decorations. She says her worn shoes are a testament to the New World Order.
“Now everything is on the bridge. My husband also does whatever is necessary, ”she says. “If we have to stay on Saturday until late, so be it.”
Although they are very busy, the familiar prohibitions of its existence – high inflation and high debt – remain. This is why she made the crucial decision in the pandemic not to refinance any debt.
They pay what they owe because they generate income. This has led to some difficult conversations with long-standing suppliers, but Santome is confident this is the way to go. Certainly another crisis is imminent, she wants to be in a better financial situation when it occurs.
To that end, she draws important lessons from the difficult year that was 2020.
“Because despite what I’m doing, the sun is coming out anyway,” she explained. “You feel helpless and you eventually surrender. And surrender is one of those things that gives you the most power because, like Jung said, what you refuse submits to you and what you accept transforms you.
This article is part of Al Jazeera Digital’s ongoing series that features small businesses around the world that have survived market disruptions from COVID-19 as well as economic challenges unique to their country.