COVID-19 and Your Small Business: Impacts and Solutions
As of September 16, there are nearly 6.7 million cases of coronavirus in the United States, according to The New York Times. The impact this virus is having on the country is devastating and extends far beyond its effect on citizens’ health. The coronavirus pandemic has brought with it a number of other issues including widespread unemployment, breaks in supply chains, and a skyrocketing number of company bankruptcies.
Right now, all of us need to do our part to slow the spread and combat the effects the virus is having on our society. As a business owner, it’s important for you to understand not just how the pandemic is affecting small businesses, but also how to adapt your business to the situation.
Small Business Closures
According to a thorough articledrafted by the British Broadcasting Corporation (BBC), the most obvious impact of COVID-19 on small businesses is the widespread closures that accompanied the pandemic. According to a study into the effects of COVID-19 on small businesses, nearly half of all businesses in the U.S. had closed by April 4. These closures were largely due to reductions in demand, supply chain disruptions, and employee health concerns. While real estate businesses, finance professionals, and other professional services were able to avoid major disruptions, retail, food services, hospitality, arts, and entertainment each reported employment declines of more than 50%.
These closures are especially devastating due to the fragile nature of most small businesses’ finances. According to the study, 75% of small businesses surveyed only had enough cash to survive two months worth of closures while the median business only had enough to last two weeks.
U.S. Unemployment Spikes
One of the major factors affecting small businesses right now is employment. Specifically, unemployment in the U.S. has gone from 3.7% to 10.4% during the pandemic. While the impact of increased unemployment on small businesses may not be obvious, that impact can be significant. Consumers without jobs don’t have the income to spend on goods and services, so businesses suffer indirectly. High unemployment also means that your employees may be worried about their own job security and may look elsewhere for more stable work. In general, low unemployment is better for businesses, even if that means staffing is more expensive.
Many small businesses are facing a huge reduction in the amount of foot traffic they see in their stores. Footfall in retail stores around the globe has dropped to an unprecedented low. In the U.S., foot traffic has been cut by more than half. While traffic has seen some improvements with the loosening of lockdown measures, evidence suggests that consumers are still anxious about returning to stores. Many shoppers say they plan to reduce their in-person shopping significantly for as long as several years.
Rethinking and Reorganizing Your Business for Reopening
Each of these factors pose a significant challenge to small business owners, many of whom may be dealing with illness in their own families. While our current situation may seem insurmountable, there are ways for your business to survive, or even thrive, during and after the pandemic.
When facing unprecedented hurdles, it’s imperative that business owners look for ways to adapt their business. With the help of ActionCOACH RGV’s business coaches, however, your business could emerge from the pandemic better than ever before.
Learn more about how to adapt your business to the demands of these unprecedented times. Join us when ReThink, ReInvent & ReOpen Your Business goes live on Facebook Wednesday, Sept. 23rd!