Speculating The Effects Of Coronavirus On Small Businesses

By Raquel Addams , Jun 2 2020
Effects of Coronavirus on Small Businesses

Featured Image: iStock/sorbetto

Small businesses have been the backbone of the US economy for the longest time. Not only do they provide millions of jobs to the market every year, they, along with medium-level enterprises, also represent 90% of all business population.

But ever since the Covid-19 pandemic has hit, small businesses have been facing the roughest end of it. A lot of small businesses have gone under; some are barely surviving, and a handful of those that are adapting and pivoting. Of the worst-hit industries due to the pandemic and the resulting shutdown, the top three are hospitality, retail, and personal services.

Collectively, they include businesses such as private medical practices, clothing and retail, bars and restaurants, and such. As these have always been the major part of the clientele-base for many graphic designers, a lot of design agencies, as well as freelancers, find themselves struggling to continue paying their rents and bills.

Today as we discuss the effects such an unprecedented economic downturn has had on small businesses, we also discuss what steps you can take as a small business owner to keep your head above the water, ensure you can retain key employees, and continue hustling.

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Facing The Uncertainty And Eventuality

Not knowing whether your small business will survive this pandemic and then having to see those worst fears come true as you close down business operations has been a struggle for many SMBs. Service-oriented businesses such as spas, salons, pet care shops, and such had to close down with everyone staying home.

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A way to combat this existential uncertainty is to take each day at a time and remember that this condition is still unfolding. Instead of worrying that you may never be able to reopen your business, just use this time to plan. Think strategically and avoid excessive worrying. If you can, consult a trusted colleague, a friend, or an advisor with whom you can discuss your way going forward.

Granted, the current state of no cash at hand may make you worry about the future but research has shown that we make the most mistakes when we’re under financial duress and are focusing on what we don’t have.

So avoid thinking about the shutdown or its effects too much – focus on planning, and keep an eye out for government grants and stimulus packages that may help you secure easy loans to reopen your business when the restrictions lift.

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Feelings Of Guilt & Other Complex Emotions

Entrepreneurs, family business owners, and start-up founders who have had to shut down their businesses temporarily or lay off valuable and trusted employees are also battling with a barrage of complex emotions that may require some basic psychological skills.

Feelings of guilt can surface if you are holding yourself responsible that you couldn’t plan for a more secure and certain future or knew how to navigate this uncertain time successfully. You may also be feeling a personal responsibility at having to let go off people who helped you establish your once-thriving business. Most of all, a sense of loss of control is what’s affecting most business owners.

Motivational coach, Marla Tabaka, addresses these feelings in her blog over at Inc and urges small business owners to not place undue demands on themselves. You are going through an uncertain time and it’s perfectly alright to feel what you’re going through. Just accept those feelings and start processing them in a healthy manner that boosts your confidence in your abilities and keeps yourself rooted in the present – instead of needlessly worrying about the future.

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WFH May Become The New Normal

A surprising effect that the pandemic has had on the business at large is that it has opened up new vistas of conducting day-to-day business tasks. For a huge majority of businesses that are still operating, virtual work has become a doable reality.

Just last week Twitter CEO, Jack Dorsey, announced that they will now allow their employees to continue from home indefinitely. In a statement to USA Today, Dorsey announced that the ‘employees who are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen. “

Twitter has emerged as the first major tech company to announce this new work model. As more and more businesses continue to realize that work from home can be more productive, and that it is doable, and that it also saves a lot of running costs for the business, we may see a new work-normal begin to surface.

If the pandemic has also forced your firm to switch over to virtual tasking, you may also be realizing its perks. Use this time to evaluate if this is something that you can see your business continuing with in the future as well. Have a strategy meeting with your advisors, talk to your employees, and devise a plan for WFH when you eventually reopen for customers.

Lack Of Online Presence Proved Devastating

For many small businesses that could have switched to remote operations, a complete lack of technological preparation proved devastating. Clothing stores, for example, who relied entirely on their foot traffic, missed a huge opportunity to continue serving their clients by not having an online presence.

Their competitors who did have online stores found out that they could mitigate the economic effects of the pandemic by completely shifting to online orders, home deliveries, or curbside pickups.

Technology played a huge role in determining, in part, which business may stay afloat and which may eventually go under. If you have found yourself at the receiving end of it, do not consider it all lost, yet. If entrepreneurs are anything, it’s tough at heart. Consummate survivors. So pivot and adapt. Talk to a technology consultant today and together figure out what should be your next move now.

Communities, Government, & Large Organizations Stepping Up

The reason a large number of businesses have had to shut down their operations or lay off people – even if temporarily – is the fact that most small businesses typically lack the cash flow and capital that can keep them comfortable in the time of an emergency.

Therefore, we see not only communities gearing up for each other but large organizations are also stepping up. During the early days as the pandemic reached the US, Facebook announced a $100 million grant program for small businesses for 30,000 businesses in 30 plus countries where the company operates. The program covers not only ad credits but cash help too so businesses can pay salaries and rents.

The government’s CARES Act is also set up to provide $367 billion in loan and grant programs for small businesses. Similarly, we see encouraging and inspiring stories of communities coming together to support their local businesses by continuing to do business with them: shopping online from local stores, buying gift cards, tipping extra, and taking advantage of discounts.

The Accidental Entrepreneurs

Paraphrasing Professor Dumbledore, some leaders have leadership and power thrust upon them; they take up the mantle because they must, and find to their own surprise that they wear it well. It was something very similar to this phenomenon that gave birth to a lot of entrepreneurs during this pandemic.

People were laid off or their working hours reduced and they suddenly found themselves unable to pay bills. This is when many of them decided to not let the pandemic get away with it and found their new professions in their passions. Some saw a need and discovered they could deliver on it through a home-based business, or some are completely revamping their old business and finding new success.

Whatever you find yourself going through right now, if you feel you’re having a ‘Eureka’ moment, trust your instinct, and start planning.  According to Forbes, accidental entrepreneurs make the best micro-business owners, so you have that going for you.

Summing Up: It’ll Get Better

While the global economy is in a pretty messed up state right now, there’s no reason to believe that it will not bounce back. Perhaps the pace will be slower than what we would like, but if a strong direction is set, we’ll all be able to weather this storm with each other’s help and support.

With an emphasis on adaptability, focus, and not giving in to hopeless worrying, small businesses can restart and eventually begin to thrive; quite similar to how these 5 find themselves doing at the moment.

Right now, the best option is for businesses to shift all their functions online as much as they possibly can and build a digital brand image using web marketing tactics such as web banner ads and Facebook ads to reach a whole new set of potential and existing customers.

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Raquel Addams is a professional blogger and graphic design enthusiast who employs a unique combination of journalism, communication design and marketing strategy to help her clients to position and launch their enterprise or start-ups.


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