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The survival of small businesses in American college towns is being threatened as restaurants, bars, and bookstores are stuck hoping students return to campus this fall

Business Insider logo Business Insider 7/3/2020 insider@insider.com (Jessica Snouwaert)
a store front at day: The store front of Bloomington Bagel Co. Sue Aquila © Sue Aquila The store front of Bloomington Bagel Co. Sue Aquila
  • Small businesses in university and college towns rely heavily upon students for their revenue. Some businesses make 80% or more of their income from university-related traffic.
  • Business Insider spoke to restaurants, bars, and bookstores in college towns around the country to find out what it is like to operate during the pandemic — and what the uncertain road ahead looks like.
  • If students don't return to campuses this fall, or if they return in lesser numbers, some local businesses face the possibility of permanent closures.
  • Visit Business Insider's homepage for more stories.

Late nights filling boxes with books, chocolate bars, and knick knacks until 2 A.M. is the new norm for Jaime Sanchez and his wife Miranda during the coronavirus pandemic. 

Jaime and Miranda are the owners of Epilogue, a bookstore and coffee shop on the main street of Chapel Hill, North Carolina. Chapel Hill is home to The University of North Carolina at Chapel Hill, and like so many other college towns, the school is the lifeblood of the community, with around 19,117 undergraduate students arriving every fall in addition to the 10,984 graduate and professional students.

The couple opened their business in November, serving family recipes from Mexico and selling a host of eclectic books. But a mere three months after opening, the novel coronavirus began to grip the nation — forcing the university to transition to remote classes and cutting off Epilogue's steady stream of customers.

The impact of the coronavirus strained small businesses across the country, but for store owners in college towns, the challenge was intensified as some saw their entire customer base evaporate when classes switched to remote learning.

Now, as universities and colleges try to figure out whether they can hold in-person classes this fall, restaurants, bars, and bookstores face an existential threat if the bulk of university students don't return to campus.

For the Sanchezes, 70% to 80% of their revenue comes from college students. That's why they adapted their business to sell books, trinkets, and goodies like chocolate online.

"Every time we get into a tough situation, my wife and I try to innovate instead of cut," Jaime said. "So if anything, it's going to be imperative that we continue to innovate on the products we have and how we offer them."

Miranda and Jaime are far from the only business owners forced to change their operations.

Sue Aquila, the owner of Bloomington Bagel Co. nestled in Bloomington, Indiana, near Indiana University's campus, had to reinvent her serving process after 22 years of business.

Instead of having customers enter the store for dine-in or take-out, she created a no-contact system using baby monitors to talk with customers through the storefront's glass garage doors. She also started using a touchless credit card reader.

"The restaurant industry is fundamentally changing, and I'm just trying like everyone else," Aquila said. 

Aquila, who typically runs four bagel shops, a catering operation, and a wholesale business, saw her usual revenue tank to 18% of its typical level at the start of the pandemic and decided it would be best to pause three of her four locations as well as her catering and wholesale business.

"If the students don't come back, the business probably won't survive," Aquila said.

According to Indiana University's website, classes will start on August 24 as a blend of online and in-person learning. But store traffic isn't the only factor Aquila must consider; she says the costs associated with running the business have also increased.

Restaurant and store owners must continue to pay rent and utilities for their spaces, but now they are spending more on protective equipment for their employees and other extraneous costs associated with changes to long-established business operations.

That's been the case for Adam Lowenstein, owner of Good Time Charley's, a staple sports bar for college students in Ann Arbor, Michigan since 1979. Ann Arbor is home to the University of Michigan with more than 45,000 students including graduate and professional students. The school plans to resume some of its in-person classes in the fall and abbreviate the semester by taking classes online after Thanksgiving. As for the winter semester, classes won't return until after MLK weekend.

Prior to the coronavirus, Lowenstein said Good Time Charley's didn't offer take-out or delivery options, but he quickly connected with delivery platforms in an effort to remain viable even if it meant taking on additional expenses.

"It's like starting a new business," Lowenstein said.

But Lowenstein says there's more to consider than just the financial side of the business — there are also the social aspects.

"Charley's is super important to the University of Michigan and Michigan students in general in terms of the culture," Lowenstein said. "Those businesses, those locations, are iconic and important and meaningful to people, probably in a way that once you move somewhere permanently you really can never create because it's so tied to a time in your life," Lowenstein added.

Creating a space for students and customers to relax and hang out beyond work and home environments was the main impetus for the creation of The Carriage House Café, a staple restaurant in Ithaca, New York between Cornell University and Ithaca College, two schools with a combined student population of over 30,000.

The Carriage House Café is a family-run business operated out of a 150-year-old restored carriage house. Aaron Chandler, a manager of the restaurant and son of the restaurant's owner and founder, said that the pandemic was a catalyst for shutting down the business.

"We just lost everything overnight," Chandler said.

a large room: The interior of The Carriage House Café. The Carriage House Cafe © The Carriage House Cafe The interior of The Carriage House Café. The Carriage House Cafe

Chandler and his family planned to eventually sell the building but wanted to run the business as normal until they found a buyer. But when the pandemic struck, that plan changed.

"One of the main reasons people come to us, into our businesses, is because of the atmosphere and the building itself, and the cozy feeling," he said.

Without the ability to share its atmosphere, The Carriage House Café struggled. Chandler and his family adapted the business the best way they could for takeout and delivery, but once schools celebrated graduation, what had already been slower-than-usual business ground to a halt and the decision was made to close the business. 

Although, silver linings could be on the horizon for other businesses remaining in Ithaca as Cornell University announced this week that students would return to campus beginning September 2 for in-person classes.

But the loss of businesses like The Carriage House Café not only creates financial struggles for owners, employees, and vendors but leaves a hole in the community, eroding the town's economic strength and communal camaraderie.

Colleges and universities fuel financial growth in their towns as much as educational growth. Without the presence of students this fall, or if schools operate under reduced capacities, more small businesses are sure to suffer.

"We don't really know what the future holds for everyone," Chandler said. "I mean it initially hit restaurants first. We're the ones with all the people, we're social and all that stuff. I do fear as the restaurant industry kind of dwindles how many other people that it affects as well. You know, we have our suppliers. It's going to be a chain reaction."

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