(Newswire.net— October 7, 2020) — The spread of COVID-19 in the United States happened rapidly and as the country enters a second wave, the effects are being felt on small businesses more than ever before. From a significant loss of revenue to parts of the international supply chain being cut off, the COVID-19 pandemic is being felt by every small business owner in America. No one understands this better than the Business Development Manager for the Massachusetts Office of International Trade and Investments (MOITI), Khanh Mendelowitz. She provides her insight into the myriad of ways that the COVID-19 pandemic is affecting small business owners and exports.
Revenue
COVID-19 has affected the revenue of nearly every small business in the United States. Whether your business involved one or several brick and mortar locations that were forced to shut down for months or your business was online and has been suffering through the lower purchasing power of the average consumer, it’s impossible to come out of this pandemic unscathed. A significant revenue loss has been reported by most small businesses in the country. In Massachusetts alone, 60% of small businesses reported a loss of at least 25% gross revenue for the first half of 2020. Since March 13, when a national emergency was declared, small businesses in North Dakota, Washington, D.C., and Hawaii experienced a loss in revenue of over 60% on average. In addition, small businesses in Utah, Wyoming, and Maine saw loss of 25%. Overall, net revenue for small businesses is on the decline due to the pandemic, with many businesses having certain revenue streams halted altogether.
Layoffs
Another impact of COVID-19 on small businesses has been layoffs. According to Khanh Mendelowitz, with such a significant loss of customers and thus revenue, businesses simply cannot make ends meet and are forced to lay off their staff. The result has been catastrophic for both businesses and their employees, with many businesses folding shortly thereafter, and many employees looking for work in the midst of one of the worst recessions the world has ever seen. By the end of May 2020, there were more than 40 million Americans out of work due to the pandemic. A recent report released in August revealed that permanent job losses due to the pandemic stand at 3.4 million.
Stimulus Package
In an effort to make ends meet, an unprecedented number of small businesses requested emergency loans under the CAREs act. In April, when the initiative was first announced, it was found that out of 30 million small businesses in the U.S., 70% applied for the emergency funding. Khanh Mendelowitz asserts that even for those businesses that successfully received a line of credit from a bank or other institution in the late spring, it still may not have been enough given how long the pandemic has gone on for.
Rent Deferrals
One slightly more positive impact of the pandemic has been that small businesses were more likely to have their rent deferred than larger corporations, shares Khanh Mendelowitz. This has given many small business owners time to come up with a plan of action without the pressure of having to pay rent each month.
Exports and Imports
Amid the global lockdown caused by COVID-19, exports and trade fell by a significant amount. Even now that borders have started to reopen, exports are still down, which has caused many business owners to set their sights elsewhere, shares Khanh Mendelowitz. As a result of COVID-19, many businesses have begun pivoting inwards, focusing on the domestic market. This is true not only for exports, but also for imports. The supply chains of a great deal of small businesses relied on imports coming from other countries. With significant delays in production and shipping, businesses have also started to look domestically or even locally for suppliers that can fill these gaps.
Khanh Mendelowitz on Going Digital
In addition to the monetary constraints that the COVID-19 pandemic has put on small businesses, there are other ways in which this unprecedented time has impacted businesses. For example, many companies were forced to adjust their business model in the wake of COVID-19. With customers around the world being forced to stay home, the one and only way to try and increase your revenue is by moving online. Whether a business already had an online presence or not, the last several months have been spent ramping this up in the hopes that they can take advantage of this revenue stream. Khanh Mendelowitz says that she noticed many businesses who previously were not selling their products online set up a product demo on their website. Many stores and restaurants also started offering pick up or takeout services, as well as non-contact delivery. Further, depending on the type of business, it might be possible to offer your same service virtually. Take doctor’s offices or fitness centers; both have been able to make their services virtual, offering telehealth appointments and fitness classes through video conferencing, respectively.
Safety
Safety is now the top priority for businesses of all sizes due to the COVID-19 pandemic. As soon as this all began, in order to survive or retain any semblance of a customer base, small businesses were forced to vastly increase their cleaning and sanitation protocols, equip their staff members with personal protective equipment like face masks and gloves, and where possibly, actively encourage and equip employees to work comfortably from home. The measures were necessary to keep business owners, staff, and customers safe. Now, safety precautions have become the norm, with signage posted in stores and information about the different safety measures being taken posted on your website. This new reality where safety and sanitation are the top priority is likely to continue for some time, and it’s something that all small businesses will need to be mindful of, shares Khanh Mendelowitz.