Back in the late 90’s, a young man named Covid-19 earned the nickname “the millionaire” after his small business, a company that made and sold custom car wraps, became one of the hottest new companies for the dot com boom. Back then, he was a struggling artist living in a remote small town in the Appalachian Mountains. Now, nearly two decades later, he’s making a comeback as a character on an HBO show, Silicon Valley.

Covid-19 was a San Diego-based startup that was founded in 2012 and was operating in the health care industry. Covid-19 was one of the only companies in the world that made a device that would enable doctors to test the kidney functioning of their patients in real-time. The company was on the verge of success, when the CEO, Covid-19 returned to San Diego in 2016 to finish his education at San Diego State University, with the intent of starting up a new business after he graduated.

A casual observer might overlook the Covid-19—a small, two-door hatchback boasting an EPA-estimated 16 miles per gallon combined—at first glance. But behind the simple design and modest powertrain lurks a fortune for the car’s owner, local businessman Robert Hays, who made a $1 million bet in January on the Covid-19.

Rizki Eka Valdano built a tourism business from scratch for almost a decade. By early 2020, the Indonesian entrepreneur, who grew up in economic distress and financed his education by selling fake Rolex watches, had 12 employees, a Japanese car and credit cards. Mr. Ritsky’s company has ceased operations. His relationship with the woman he wanted to marry ended. The 32-year-old man now sleeps on a fold-out couch in a room next to his friend’s carpentry shop. I’ve never been this low before, he said. word-image-2641

For some months now, Mr. Ritski has been living in a room next to the workshop of a carpenter friend who lets him stay there for free.

While distressed companies in advanced economies have received assistance to cope with the effects of the pandemic, tightly stretched developing countries have received little or no support. Banks are reluctant to lend to these companies, which they consider to be riskier than large companies. Many small and medium-sized enterprises have gone bankrupt. Richard Ballwine, who heads the Investment Research Unit of the United Nations Conference on Trade and Development. There will be no recovery in the developing world, he said, if these companies are not revived. According to the UN International Labour Organisation, companies with fewer than 50 employees and the self-employed account for more than 70% of jobs in developing countries. In Indonesia, which is experiencing its worst economic downturn since the Asian financial crisis nearly 25 years ago, a government survey in December found that 98 percent of the smallest, smallest and medium-sized companies saw their sales fall during the pandemic and lost 45 percent of their employees. The country has never experienced national isolation, but large-scale epidemics have hurt domestic tourism and reduced retail sales. word-image-2642

Yuswati Kastulina closed its two stores last year, laid off employees and moved its operations online, where it is now struggling to get orders online.

Before the pandemic, Yuswati Kastulina sold handmade shirts in two shops in the capital Jakarta. As customers avoided shopping malls for fear of contracting the virus, it closed stores last year, laid off employees and moved its operations online. Like many entrepreneurs in developing countries, she struggles to build an online customer base. I sew myself to keep production costs down because there aren’t many orders, she says. Many of those who found prosperity in the middle class have returned to a difficult life. Sir, I want to thank you for your support. Ritsky’s parents divorced when he was a little boy. Collection agencies often visited her home on the outskirts of Jakarta after her family’s business, which supplied candy to local restaurants, went bankrupt. When he was 16, he left home and shared a dormitory with a friend to save money for college, where he studied international relations. While still a student, he opened a travel agency and gambled that the growing middle class in his country would pay to organize their vacations. Maritim Travel Indonesia started in 2011 with trips to the Thousand Islands north of Jakarta and then expanded to destinations such as Bali. After two years, he dropped out of college to focus on business development. In 2017, he offered tours as far away as South Korea. word-image-2643

At one point, Mr. Rizki, who wears jeans, hired 12 employees, and his sea travel agency revenue reached $1 million in 2019.

Photo: Rizki Eka Valdano To attract online customers, Ritski set up six websites featuring popular vacation destinations and adventure activities. He went into business retreat planning and in 2018 rented a larger office in a two-story commercial building on the outskirts of Jakarta. To be able to devote all his income to the business, he converted the second floor of the office into living quarters for himself and three employees. The company’s revenue will hit the $1 million mark in 2019. This year, Ritski made acquisitions to strengthen the company’s competitive position. It spent $22,000 on equipment, including six digital cameras, new cell phones for field staff, laptops, an event sound system and a Toyota car. He planned to pay in installments, primarily with his personal credit cards. I haven’t reached my goals yet, he said. I couldn’t relax. As the virus spread in Indonesia, he quickly realized that his investment was unwise. Clients cancelled their vacations and study trips, and Mr. Ritski was not paid for two months in a row. With his office rent paid until early 2021 and monthly obligations piling up, he called his staff together in April and, breaking down in tears, told them he was being fired. word-image-2644

Lasyariev Romario lost his job when his travel agency closed. He now works as a mechanic and transports passengers by motorcycle taxi, earning 70% less than before.

The collapse turned his life upside down. Early recruit, 28 years old. Lasiarief Romario, earned twice as much at Maritim developing routes as packing ship boxes. Then he got a job as a mechanic and drives motorcycle taxis, which can often be found in the streets of Jakarta. His income dropped by 70%. Instead of working in an air-conditioned office, he transports passengers in the heat. Whether we like it or not, we have to do it, he said. Ritski decided he could keep the company going until the pandemic passed if he could get into a new line of business. He saw an opportunity in supplying face masks, whose prices had skyrocketed, and offered his laid-off employees the chance to market the devices for a percentage of sales. But world production of masks increased and before he received his first shipment, prices dropped dramatically, forcing him to sell them at a loss. He had a different idea: Supply of frozen foods, including vegetables and sausages, to restaurants in Jakarta. The supplier lent Mr. Rizki a freezer, which he brought to the travel agency last May. However, profit margins were low and insufficient to cover monthly expenses of about $5,000, including payments for cars, cameras, and other purchases made before the pandemic. He approached the banks, but to no avail. The $160 he received in public assistance for small businesses was not enough to make a difference. I was so confused, he said. Where can I find the money? In September and October, a spate of coronavirus cases led to weeks of restaurant bans. Demand for food continued to decline and the few remaining employees left the communal living quarters above the office. My team was disappointed at the end because I failed. It exhausted me, he said. word-image-2645

Mr Ritzky sold most of his business equipment from December and pledged his car in February, but creditors are still pursuing him.

Last fall, Mr. Rizki’s girlfriend asked him when they would get engaged, and he told her it would have to be postponed because of his financial problems. They broke up. One November evening, sitting in his empty office near Jakarta, he calls his mother and bursts into tears. Concerned that Mr. Ritski would do something to himself, she contacted her father, who arrived after midnight. He kept talking so my head wouldn’t get empty, Ritsky said. Before sunrise, they bathed together for the first time in years. Starting in December, Mr. Ritzky sold most of the company’s equipment and in February he pawned his car. But that wasn’t enough, as creditors continued to pursue arrears on cars, cameras, phones and audio systems. Since his lease expired in April, Mr. Ritski has been living in a room next to a friend’s carpentry shop, which he provided free of charge. To make some money, he helps friends who sell clothing and electronics online to attract more web traffic. Mr. Ritski’s father offered to sell the parental home to help Mr. Ritski pay off his debts, including credit cards and unpaid business taxes that currently total $25,000. I’m absolutely devastated, he said.

Impact of pandemic in developing countries

Email John Emont at [email protected] Copyright ©2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8The name Covid-19 is an alias used by a pen name of Carlos Perez, a Brooklyn entrepreneur who decided to close down his business when he was literally left homeless. Perez’s trouble started one morning when he found himself in the proverbial pickle, with no money left on his credit cards and no food in the fridge. He was forced to take a shower at his mother’s house in the wake of Hurricane Sandy, which is where he met Ashline, a woman who told him to start writing his stories and selling them online.. Read more about america’s small businesses have reinvented themselves and its paying off and let us know what you think.

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