COVID-19 Impact on Small Businesses
Small businesses are the core of America’s economy.
Small business provides opportunities for entrepreneurs, support local communities, and supply jobs for hundreds of employees. Local economies would come to a grinding halt without small businesses. Unfortunately, they are also the most vulnerable businesses, even before the worldwide pandemic struck.
COVID-19 has taken the lives of over 200,000 people in the United States since March, and it doesn’t appear to be slowing down. This is an invisible threat like we’ve never seen before; an easily transmissible virus that can be carried asymptomatically. Aside from its impact on public health and safety, it has also had disastrous economic consequences.
The measures that are necessary to prevent the spread of a deadly virus are also measures that cripple businesses, especially small ones. As scientists learn more about the novel coronavirus, they have continued to release information about proper safety precautions. Social distancing, face masks, quarantines, lockdowns, and avoiding indoor spaces drastically affect the way businesses operate. Stores and restaurants have had to limit their occupancy, enforce face masks, make ample room for social distancing, set up plexiglass, and more, just to keep up.
Shutdowns & Closures
The self-inflicted economic shutdowns and non-essential business closures have hit Americans hard. Active business owners in the US dropped by 22% from February to April when the pandemic first struck, the largest drop in history. African-American and Latino owned businesses were hit especially hard, with up to a 41% drop in their business activity. The fallout from the pandemic could profoundly affect minority and immigrant-owned businesses, and all manner of small businesses, for some time.
Unemployment surges have hit the US particularly hard; at one point there were a record 23 million people unemployed. 49% of the American workforce work in small businesses, which are defined as companies with fewer than 500 employees. Small business jobs are particularly vulnerable when compared to other jobs; they comprised more than half of all vulnerable jobs during the pandemic.
Navigating COVID-19 for Small Businesses
Navigating the precautions, public fear (or lack thereof), and medical and economic repercussions of COVID-19 has proven to be an impossible task. The situation is continuously changing, as are public perceptions and government mandates. With cases spiking and some states loosening restrictions, businesses must determine how to move forward.
With the fear of a second wave, many small businesses are apprehensive about hiring back employees and reopening fully. 65% of small businesses are concerned about spikes in COVID-19 cases, and have made preparations like purchasing additional products for future shortages. Companies must develop a plan that evolves as the pandemic does, rather than set-in-stone decisions that could end up being reversed later on.
Small businesses have had to reimagine how they interact and do business with their customers. A fourth of small businesses have turned to e-commerce to stay afloat. Some of these new online services include: curbside pick-up, “contactless” delivery, and virtual shopping. The convenience and perceived safety of these services are designed to keep returning customers and attract new ones. The sudden rise in digital commerce will change how small businesses do business from now on. With Black Friday and Small Business Saturday coming up, it will be interesting to see how small businesses accommodate the influx of customers both online and in person.
The Future for Small Businesses & America
The future of America’s economy rests in the hands of small businesses. For the past two decades, they have provided 64% of all new jobs in the US. They are more adaptable to dynamic economic situations like COVID-19 because they are closely tied to their communities. Small businesses are the first to meet consumer demands. They are far more in tune with the public than larger corporations, and as a result can shift the focus of their products and services to fit the public’s needs. The global pandemic has devastated the country with deaths, business closures, and lost jobs, however, America’s way out of it rests on the backs of small businesses.
Thankfully, GritForce Bookkeeping is here to help small businesses do what they do best! They provide a virtual bookkeeping service, personalized for small businesses and non-profit organizations. GritForce works with you to get your books in order so you can focus on your main priorities. Their goal is to assist you to understand your financial position, enabling you to make smarter, informed decisions.