Five years ago, the COVID pandemic dealt a swift blow to San Diego small businesses, leading some of them to close their doors permanently shortly after the first lockdown in March 2020.

Others, like Trilogy Sanctuary, held on, in a state of limbo.

“I remember the day when they said everything was going to be shut down and you couldn’t do this, you couldn’t do that,” said Leila Caldera, the co-owner of Trilogy Sanctuary in La Jolla. “I remember that day so clearly. It was terrifying, because everything that we’d worked towards and worked on — this is our everything. And we decided … we had to shut down, we had to close the doors, we had to stop classes, stop serving food, stop the boutique and let go of a lot of staff.”

In the coming months and years, she would revisit each of those decisions and adapt as COVID case counts rose and fell.

“It was such a challenging time,” she said.

The uncertainty was especially hard, she added. “We really had no idea what was going to be happening next. Would we ever open again? Would this be it?”

Five years later, Trilogy is busy serving customers in its cafe and teaching yoga to health-focused San Diegans. Many other small businesses are still struggling with their post-pandemic recovery, and still others did not pull through.

“Although the pandemic’s impact was felt throughout the entire economy, small businesses were disproportionately impacted,” said Sang Ngyuen, the San Diego Regional Economic Development Corporation’s research manager.

The pandemic dealt them a swift and severe blow early. The number of small businesses in San Diego County declined by 26.4 percent from January to April 2020, Nguyen said, citing regional and state data. As the virus waned, San Diego’s retail and service industries weathered other disruptions, including supply chain snarls, fast-rising rents, food and utility costs, and laws that raised wages.

Today, San Diego County’s small businesses sector is telling a different story.

“Small businesses rebounded very quickly despite the environment that the pandemic introduced,” Nguyen said.

San Diego ranked third for most new business applications in the state in 2023. A 2024 survey conducted by the EDC and two other entities showed that nearly a third of the region’s small businesses expected to increase hiring over the next 12 months, with the highest projected growth in firms in the innovation economy, which include life sciences and communication technologies.

“This is a change in the sentiments regarding past growth, where nearly half of small businesses surveyed reported no growth and 19 percent indicated a decline in employment,” Nguyen said.

Alan Gin, a professor of economics at the University of San Diego, said San Diego County added 48,800 jobs between January 2020 and 2025. That growth was dented by the pandemic, he added.

“We now have more jobs than before the pandemic,” Gin said. “I think definitely without the pandemic, we’d be much higher. If you divide that just by five, that’s less than 10,000 jobs a year. We probably would have averaged maybe 20,000 jobs a year. It’s probably half of what it would have been without the pandemic.”

Industries where small businesses are prevalent have tended to lose jobs, while growth was concentrated in health care, social assistance and construction.

Retail trade, which includes small and large clothing stores, lost 6,700 jobs, around 5,500 of which were not in department stores. Health and personal care retailers lost 900 jobs. Sporting goods, hobbies and the category that includes gyms, salons and barber shops together lost 500 jobs.

“I think there was a shift caused by the pandemic, that people reoriented what they did, and what they found was necessary, so they made different choices,” Gin said, adding that the shift in consumer habits as shaped by the pandemic is still unfurling.

‘A ripple effect’

The lockdown sideswiped Millicent Hultenius, owner of the Millicent and Company salon in La Mesa.

“It has been devastating for me,” said Hultenius, who estimates her business lost $170,000 in six months when COVID restrictions were first implemented. “I still haven’t recouped it.”

The stylists at the 5,700-square-foot salon are independent contractors so Hultenius did not qualify for a Paycheck Protection Program (PPP) loan given to small businesses to help them keep their employees on payroll during the pandemic.

“Clients that used to get their hair colored all the time stopped coloring their hair because of COVID and then some of them decided to just leave it that way” after restrictions were lifted, Hultenius said. “So in every category, it was a loss.”

A sharp rise in inflation that followed delivered a punch to the gut that still stings.

“It is just like a ripple effect,” Hultenius said. “They (clients) can’t afford groceries so they’re certainly not going to afford their hair. And I have estheticians that do facials and stuff. That’s the last thing on (customers’) list because that’s a luxury. They haven’t been able to have luxuries.”

Prior to the outbreak, the salon had a staff of 52. While a visitor saw a steady stream of customers file through the Palm Avenue location earlier this month for hair, beauty and wellness services, Hultenius said she’s still training new staff to get the headcount back to 2020 levels.

“You live your life to try to get further ahead and then this just wipes it out and I haven’t recovered from it,” Hultenius said while taking a break from styling the hair of one of her customers. “And yes, it’s extremely frustrating.”

Five years on, is she optimistic?

Hultenius paused. “I’m hopeful that things will get back. I certainly pray about it.”

‘It took the village’

Trilogy Sanctuary and its yoga and aerial silk classes, clothing boutique and plant-based restaurant, all perched on a La Jolla rooftop, was a new concept in San Diego when it opened in 2014. That innovative rooftop setting is part of what helped the business hang on through various stages of the pandemic.

“We were lucky because we had the whole outdoor deck,” Caldera said.

Initially the business did shut down, and reopened as restrictions loosened. As the pandemic waxed and waned, Caldera kept adjusting her approach, reopening and closing the restaurant, rehiring staff, teaching yoga with 6 feet between students; eventually she built an indoor-outdoor dome-shaped yoga studio with removable walls.

Caldera, who had a preschooler and a newborn in 2020, worried if she was making the right choices: which classes or services to offer, when to scale back, how to strike a balance between prioritizing health but also salvaging her family’s livelihood.

“We weren’t really earning money because it’s quite a small space. You could maybe have a maximum five to 10 students because of the 6 feet apart. So there was a long period of time where we were not making a profit at all,” she said. When she couldn’t pay rent, the landlord “let us kind of accrue a bit of a debt. And we sort of owed it later, if you will. But if that wasn’t the case, if they said, ‘No, you have to pay your rent on time,’ we probably wouldn’t have made it.”

One thing she did not waver from was following regulations. “We understand the importance of the rules,” she said, “and of course we don’t want to be a place where we’re spreading anything.” They made one exception: letting customers eat their “to-go” meals on the terrace if there was no one else around. She gestured to the broad terrace, where small tables were still spread out and where a mix of yoga classes and mid-morning meals were unfolding under the soft spring sun.

The business got two PPP loans totaling around $325,000 to cover payroll. The loans were fully forgiven.

Five years after that “terrifying” day, her business is again profitable and has slowly added staff back, now reaching the same headcount as before.

Trilogy pulled through because of customers who went out of their way to support the business and order food to-go, the landlord’s lenience with rent, the PPP funding, its outdoor space and the health focus of her business at a time when health was on everyone’s mind.

“It kind of took the village,” she said.

Still, she added, “since COVID it’s been a lot harder to be profitable. I think that has a lot to do with rising costs. Or at least, costs going up and down,” she said.

An unexpected surge in shoppers

In La Mesa, Marie McLaughlin keeps busy behind the counter of the La Mesa Antique Mall that she owns.

When the shutdown came, McLaughlin and her staff “were terrified of the consequences of COVID because our funds were wavering,” she said. “And we were very concerned that we wouldn’t be able to have our dealers pay their bills.”

But the store qualified for a PPP loan and also received a $5,000 grant from the city of La Mesa when the shop’s sign was damaged after violence, fire and vandalism broke out May 30, 2020, following a Black Lives Matter demonstration in the city.

After shutting down for about two months in March 2020, the shop reopened as per COVID-19 mandates, such as masking and customers and employees staying at least six feet from each other.

To McLaughlin’s surprise, business not only picked up where it left off, but actually grew.

“We were able to recoup very well because unlike big businesses like movie theaters and bowling alleys, there was nothing people could do but go shopping,” she said. “So stores that were able to stay open really benefited.”

McLaughlin estimates her 6,200-square-foot store with a staff of five has seen a 10% year-over-year increase in business since 2020.

“We attribute that to young people discovering how terrific collecting antiques is because being able to come in and shop here, they discovered the value and appeal of it,” she said, pointing to the toys, comic books and collectibles her shop sells.

“Our clientele was older and now it’s predominantly young people.”

Craig Maxwell, owner of Maxwell’s House of Books had a similar experience.

Even though his 1,440-square-foot cubbyhole packed with used books was closed to walk-in customers during the first few months of the lockdown, Maxwell saw a 30% to 40% boost in sales during that time because customers sharply pivoted to buying books online.

“People around the country were all staying home because they didn’t have stores and businesses they could go to,” said Maxwell, who has owned his shop for 22 years. “They were sitting in front of their computers and looking at things to buy and, boy, did they buy.”

After mask mandates and other restrictions lifted, sales have returned to levels that Maxwell saw prior to the pandemic.

“It was actually a very good time for me and I felt bad because I was an anomaly in that regard,” Maxwell said. “So many other businesses struggled so hard and so many of them actually shut down.”

‘We are not closing’

For Debi McNamer, of Pine Valley, the virus posed a double threat: to her husband, who has an underlying health condition, and to the roughly 10 employees whose livelihoods she felt responsible for as the co-owner, since 2005, of Major’s Diner in Pine Valley.

“We were always careful … for him more than anything, because he’s diabetic,” she said of her husband, Larry. “But I think we were more fearful of, what are we going to do now. Our employees, you know, all of that.” One server had worked there for more than 30 years. “So she wasn’t going any place,” McNamer said.

On top of wages, they owed rent and a mounting energy bill.

“It wasn’t a question of, do we stay open,” she said. “We had to at least have some income to pay for some of those bills.”

Today the building houses a charter school. McNamer creates and sells crafts. Her husband, Larry, returned to his audio installation business, which had all but halted when live entertainment stopped in 2020. The diner closed in 2023.

“Before COVID-19 entered our world, persons from every corner of the globe would … stop at Major’s to feel the ’50s vibe that it generates. Last year was tough for all of us, but the restaurant industry took a big hit, and Major’s didn’t get through the previous 19 months unscathed,” Debi McNamer wrote in a GoFundMe campaign in 2021.

When the pandemic had first erupted, Major’s closed its dining room and only served food to-go. A few months later, indoor dining was allowed again, then it was again forbidden.

“They decided they were going to move everybody back outside,” Larry McNamer said. “That was the county that decided all that.”

Pine Valley gets cold. People weren’t comfortable eating outside, unlike in warmer parts of the county. “So we made the decision that people could come inside,” Debi McNamer said.

That brought a lot of attention, wanted and unwanted. That November, Larry landed on local TV news, where he said he would not follow another mandate to shut down indoor dining as infection counts rose. A few days later the diner got a cease-and-desist order from the county, along with more than 30 restaurants, gyms, bars, churches and a dance studio.

It also found supporters. “We had customers as far away as Marina del Rey,” Debi said. “They drove down because the news went viral, and it went up to all the L.A. stations. They’re like, we’re going to go down and see what this is. So we had a full restaurant every weekend.”

Even with that added traffic, the business was down to five days from seven, and losing money. It was denied a PPP loan, which “made us feel like the government didn’t care about the little guys, that they wanted to make sure that those big companies stayed alive,” Debi said. Then, after more than two years of flexibility with back rent, which the couple was slowly paying back, the landlord raised rent and then told them to move out, Larry said. (They had also owed $33,000 to SDG&E, which the utility fully wrote off.)

Debi said she was guided by customer preferences. Some liked sitting outside, some inside. Some wore masks, some did not. She put sanitizer bottles on tables for whoever wanted it. Her staff wore masks and kept a safe distance from customers, she added.

In opting not to re-close the indoor dining room, Larry was guided by his faith. “God was telling us, ‘You know what to do here,’” he said on a recent morning over a cup of coffee.

He also saw the government’s orders as overreach, and he had said as much on TV news. “I looked into the camera and I said, ‘This is for all the people in San Diego that are making decisions for things that are happening up here. Not only no, but hell no. We are not closing. You know where I am. Come get me,’” he said.

McNamer surprised himself, defying the county’s mandate. “I felt like I can’t believe I’m going up against City Hall!” he said.

The experience awakened something in him, he added. “I had a really hard time trusting my government at that point, and I’ve always been one to trust my government, but I felt like somebody back there in D.C. is — this isn’t right. I don’t care what you say about it. It’s not right. … They have shut the world down. That isn’t right.”

Five years later, their restaurant is gone, the pandemic has receded, but his conviction that the government should not interfere in how businesses operate remains. Did he emerge more cynical, more bitter?

“I don’t want to say more bitter,” he said. “It wasn’t bitter. It was stronger. Absolutely: stronger.”

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