It's hard to avoid backspin as Minnesota dance schools reopen during COVID-19

The students entering class at the South Metro Dance Academy in Lakeville stand still as their instructor points a digital thermometer at their foreheads. Nobody with a fever can enter the studio.

In addition, students must wash with hand sanitizer to gain admission. They are encouraged, but not required, to wear masks. None do.

These preteens and teenagers are renewing lessons suspended for 3½ months by a coronavirus stay-at-home order. They need the lessons to succeed in upcoming competitions.

Their teacher, Jeanne Johnson, needs them to stay in business like many activity businesses from gymnastics to karate centers that were forced to shut down by stay-at-home orders to help stem the spread of COVID-19.

Now, it's a waiting game to see if the reopening will bring in enough income to save the business Johnson used her life's savings to start 16 years ago when she was 40.

But the economic realities of the COVID-19 era threaten to take her dream business away.

Her landlord has ordered her out of her space by July 15 because she is behind on the rent. She is scrambling to find a smaller space where she can open under a new name. She needs a new landlord who is willing to tack her first few months' rent onto the end of the lease. She has very little cash.

"I felt like I was at the top of my game in February," Johnson said. "It's hard for people who don't have a small business to understand how hopeless this feels."

Amid the worldwide pandemic, millions of small proprietors will struggle, said Shaker Zahra, an entrepreneurship professor at the University of Minnesota's Carlson School of Management. According to government records, in 2018, there were 127,132 businesses in Minnesota with fewer than 10 employees. That represented 74% of the state's total count.

Small mom-and-pop businesses often operate on thin profit margins with few reserves, he said. The issue becomes "how to generate cash until people become more comfortable" with reopening the economy.

The cost of small businesses reopening safely in the pandemic adds the extra burden of virus prevention expenses, said Holly Wade, research director at the National Federation of Independent Business. Tenuous cash flow means small businesses such as Johnson's that depend on people interacting could face a "longstanding" crisis, Wade said.

Johnson, who owns one of Minnesota's roughly 1,000 dance- and gym-related businesses, has done everything she can think of to save her dance business.

She received an emergency grant from the government. She took out a forgivable $61,000 Paycheck Protection Program loan from the U.S. Small Business Administration and used it to pay her staff in April and May. Lacking cash to pay back students' lost lessons, she offered parents credit toward future lessons.

To keep students and parents engaged after the March COVID-19 shutdown, she conjured connections. Zoom dance lessons for half price. A YouTube channel to showcase steps and stretches.

A car parade of students to drive by the studio and see one another. A red carpet photo shoot where individual students had pictures taken at a theater entrance in near isolation in costumes they had purchased for a recital that could not take place. (Three minutes per portrait with a sanitizing scrubbing of the venue between each.)

A recent outdoor tent performance attracted about 100 parents.

Still, it may not be enough.

As the pandemic took hold, the South Metro Dance Academy had 300 recreational and competitive dancers. Today, roughly two weeks after reopening, Johnson has about 110 competitive dancers coming for lessons at various times. Her recreational dancing business is still on hold as parents — some of whom have lost jobs — decide whether to let children return.

"Two-thirds of my income comes from recreational students," Johnson said.

Operating funds are scarce. Before the shutdown, Johnson prepaid $28,000 for a major competition for her students. After the shutdown, the competition's organizers postponed, but did not cancel, the competition. So the promoters returned none of her money.

Some of her staff have opted for unemployment that with the federal $600 weekly supplement comes out to more than their normal paychecks. She has $3,000 left from the government money to supplement anemic cash flow.

Ticket revenue from June and July recitals and summer camps traditionally paid expenses for those months. Tuition collected in August for September classes covered the rest of the summer.

"I feel like Marley in 'A Christmas Carol,' " Johnson said. "Every day, I worry I am going to come to work and find the doors to the studio chained shut."

While no formal trade association exists, dance-school owners from across the state share worries and survival strategies on a Facebook page. In addition, Johnson has a circle of other studio owners with whom she speaks regularly.

Mary Plein, who opened Fusion Dance in Red Wing in 2002, faces many of the same concerns as Johnson, including tens of thousands of dollars lost to prepaid recitals.

Almost all businesses that could went to online formats as the pandemic took hold, Plein said. But a digital approach works poorly for performing arts and some students dropped out.

For children and teenagers, "watching a teacher on a TV screen is absolutely not the same thing as being there in person," Plein said.

As revenue shrinks, increased costs of doing business in the pandemic remain unrelenting and unavoidable.

"I've gone to extra, extra efforts to keep the studio clean," said Johnson of her South Metro academy. "I clean the floors with Ecolab hydrogen peroxide. I try to impose social distancing on the dance floor, although that is almost impossible with teenagers."

She sanitizes the studio between classes.

To try to block COVID-19 in the air, she installed HEPA air filters throughout her building that capture very small particles.

She explained her efforts in a written reopening plan distributed to city officials and parents of students. The plan encouraged students to wear masks, but left the decision up to individual parents. None of her students currently wear masks.

"It may be because we live in an area where not many people wear masks," she said.

Johnson takes solace in the fact that none of her current students has tested positive for COVID-19.

Among those who did not return are a couple of students with medical conditions and some who don't want to risk getting sick.

"Parents with younger kids might be afraid to send them back," Johnson said. "I think there's a lot of fear of the unknown."

This kind of anxiety finally convinced her to suspend recreational classes. What's left are serious, committed competitors.

Libby Huettl had no concerns sending her 10- and 12-year-old daughters back to Johnson's studio.

"Jeanne is very cautious," Huettl said. "She closed even before the governor said to. She kept us tuned in. There was never a time when there wasn't something to look forward to."

Huettl's job mitigated her worries about reopening. She is an elementary school principal whose building has been used for child care. She has seen "kids around other kids" for the duration of the pandemic.

When Jenny Kerr's 17-year-old daughter said she wasn't sure she was comfortable returning to dance lessons, Kerr sat down with her daughter and her husband and pored over Johnson's preparedness plan. Both of Kerr's daughters began dancing with Johnson at age 3 and South Metro academy has been their second home. One child aged out of the studio last year.

"Jeanne has always been determined," Kerr said. "As far as I know, she did everything she could to keep the business going. Her whole life is her studio."

Having her child go back posed "some lower risks," Kerr said. But she told her daughter that the family would never put her in a situation where they thought she would be hurt.

"The Minnesota numbers [for infection] look pretty good," Kerr said. "Jeanne takes classes outside when she can. She's given so much thought to this."

Johnson is still thinking about how to move and reopen. Like most small-business owners, the pandemic took her by surprise.

"When I closed on March 12, I was hopeful it would only last a month," she said.

A new space and a new name alone won't save her. She will need an understanding landlord. She may have to go to a semester billing system instead of month-by-month to ensure cash flow. Some days she finds herself in tears worrying about what to do.

Giving up on a dream built over 16 years is almost inconceivable, not only to Johnson, but to many of her students.

"If she had to move, we would absolutely move with her," Huettl said. "If she had to close, it would be devastating."