Small Businesses Matter Beyond Their Neighborhoods
Small businesses have been bearing the brunt of COVID-19 related hardship since the pandemic hit. Small businesses make up 44% of all businesses in the U.S. economy, and account for two thirds of new employment creation (put in another light: 35.7 million employees risk job loss due to the impact COVID is having on small business). It’s never been a more important time to consider the important role of small business in our economy and protect them at all costs. Local small business is integral to the culture of a community, provides resources and experiences, and affects the landscape of an area.
Nearside has covered extensively what’s available for small businesses as far as the PPP loans and other options to help small businesses stay financially afloat, but there are some realities to face when it comes to small business development right now, and some things small business owners can do to make sure they survive. In fact, depending on the kind of business you’re in, a recession can be a great time to start a business.
Rapidly Changing Consumer Demands:
Finances: It really does come down to money, and small businesses don't have the resource stores to stay running throughout long periods of closure. The smaller the company, the tougher it can be. Most small businesses have two months of payrollsaved up, some even less if they are young, which is why, often, expense cutting comes down to layoffs. No small business can afford to lose staff, and often if businesses cut down to a skeleton staff, they are still losing too much money too quickly.
Change in Market Demand: Small businesses are more affected by the volatility of their consumer base, and market demand plays a greater role in their survival. Since businesses like boutiques and cafes rely on foot traffic and customer engagement, businesses have had to get creative on how they run things. This can involve a lot of trial and error with funds they don’t have. While not all small business lenders require stellar credit, many do, thus leaving businesses at the mercy of GoFundMes or elaborate purchase options.
Adapting to What Your Consumer Wants: Much of thesmall business customer basehas shifted, with many consumers losing jobs or lives changing dramatically. Thus, the products and services communities once revolved around have changed. Adapting to what your customer needs is a great way to preserve your relationship and protect your revenue.
Since there is little that can actually be controlled at this time, running profit and loss projections can help small businesses reckon with what their realities are. But never fear, there are options available to help your business survive the pandemic, and evolve. Once the stress eating and panicking has begun, remember that you have options:
Staying Financed Through Changing Times
Alternate funding resources have never been more crucial, so be sure to take advantage of them!
The Paycheck Protection Program (PPP) is offering loans for small businesses with forgiveness for business owners using the program for payroll, rent, and utilities. The deadline to apply is June 30th, and loan forgiveness options have recently been changed (for many, loan forgiveness will be easier to attain)
Debt Relief loans aren’tjust coming through the federal government, but on the state side as well, helping states preserve their local economies. Applying sooner rather than later is encouraged, and several have employee caps at 100 so as to prioritize the mom-and-pop shops, smaller medical practices, and hospitality industries.
A variety of non-government loans are still available to help you through the pandemic. We did a breakdown of your best bets in terms of loan size, the credit score needed to apply, interest rates to look out for, and the time the money takes to get to your account. Depending on your needs, certain loans might be better than others.
Adapting How You Operate
Improving your online presence is a must, and a lot of small businesses have been skimping on it to prioritize traditional advertising like newspapers and local print advertising. But running an online shop, building out your restaurant take-out options, or developing driveby services not only serves your customers, but grounds your personal relationship with them. Most of your customers would rather be in your shop or restaurant or office, and are bummed they can’t be. Building a strong online strategy is a better way to connect, and also create an accessible system for disabled or elderly customers who won’t be leaving the house for a while. This also means collaborating with other small businesses in your area. Encouraging customers to invest in local business and cross-promote things can increase your visibility and build better community.
Have a safe reopening strategy that complies with your state. Find out which phase of opening up your state is in and what the recommendations are for your business.
Regardless of your state's restrictions, here are some of the most common recommendations applying to all states, from the US Chamber of Commerce:
The Six Foot Rule: Finding a way to keep six feet between your employees, and your employees and your customers. This could mean limiting the number of people in your store, or setting up tables and chairs further away from each other. This might be challenging, and awkward at first, but most people adjust quickly.
Prioritizing Employee Wellness: Ensure employees have the PPE (Personal Protective Equipment) they need, such as gloves and masks. Encourage employees to stay home if they feel unwell. It might be a good idea to invest in a forehead thermometer, as some states may require in-office fever checks for employees and customers.
Contact-less Transaction Methods. This could mean getting a card reader or setting up online payments, if you were previously a cash business, or creating pickup station for people to get their items after ordering them from a clerk or online.
Communication: Less a science, and more of an art. For both employees and customers, complying with these changes isn’t exactly easy. But, remember, most people want to get back to work, and your customers want to shop from you again. Explaining the new way of doing things clearly and openly relieves confusion and anxiety around the new “temporary normal.” This could be email campaigns, extra signage on site about hours or lining up, and prepping customer facing employees with answers to FAQs.
The realities that small business owners are facing at the moment can be quite nerve-racking. When you consider past events like the Great Depression and Great Recession, small businesses were hit the hardest, contributing to the greatest profit losses and job losses.
However appreciation for small businesses continues to runs deep, and their contribution to society is greater than economic. Young small businesses (under five years old) are a main engine for job creation and overall expansion and growth. Since the shelter-in-place started, communities have prioritized shopping small and sought out how to help small businesses persist and thrive. Now’s never been a better time to begin an online presence and email correspondence with your customer base to remind them that you’re in business and there for them.
At Nearside, we offer small business owners something that no other lending company does: a fresh start and the benefit of the doubt. We extend a line of credit (up to $5,000) to business owners who are just starting out, without requiring a previous business history or a great credit score. Click here to learn more about applying for your Nearside Card today!