4 Challenges Facing Small Businesses

After months of sheltering-in-place, people are anxious to return to work and have the freedom to enjoy outdoor activities. With the economy in a downward spiral, 29 states are gradually lifting stay-at-home restrictions and giving individual businesses the green light to re-open immediately or within the next few weeks. Now the challenge is for businesses to come up with acceptable ways to operate within the guidelines of the “new normal” established by the government to prevent the spread of COVID-19.

This situation requires putting measures in place that will help protect the public and address the safety concerns of employees. Every business will determine what options make sense for their organization. However, there are specific steps that businesses are taking to apply before re-opening safely.

“In order to survive, small businesses need to find a path to getting back to work, re-opening, and serving their customers, but there are justifiable concerns over what re-opening or operating a small business looks like while fighting a pandemic,” said Neil Bradley, executive vice president, and chief policy officer at the U.S Chamber of Commerce. “Re-opening is going to happen at a different pace throughout the country based on local conditions, and consistent guidance is necessary as businesses look to re-open and operate in a way that is safe and sustainable.”

Virtual Workplaces are on the Rise
The pandemic has forced everyone to find new ways of working. Whereas teleworking is a common practice for large corporations, small businesses are now making the transition to work virtually. According to the Small Business Coronavirus Impact Poll, a survey conducted by the U.S. Chamber of Commerce and MetLife, 17 percent of small business owners have a more significant digital presence than they did last month. This reflects a 7 percent increase. Additionally, businesses are also asking for flexibility in terms of rent. This request coincides with transforming a portion of their work environment into a virtual space. The survey also highlighted several other notable changes in how businesses are operating.

• 27 percent of small businesses have shortened their hours
• 26 percent have asked customers for support or started a crowdfunding campaign
• 19 percent have adjusted employee salaries or hours
• 19 percent have applied for a working capital loan (almost a five-fold increase since last month)

Businesses Need PPP Funds to Re-open
Although state governments are beginning to allow businesses re-open, the sad reality is that many small businesses are trying to hold on until they receive PPP funds or other sources of funding. Since these businesses are the backbone of our economy, they must receive funding quickly to fuel an economic upturn. “Small business owners are the foundation of our communities, and they employ nearly half the American workforce. So many are struggling right now to keep their workers employed,” said Tom Sullivan, vice president of small business policy, U.S. Chamber of Commerce. “With the latest round of PPP funds nearly exhausted, it is essential that we identify ways to step up for Main Street and find a solution for additional funding measures.” The report found:

One-third (32%) of small businesses have applied or tried to apply for a PPP loan, and another 13% are still planning on applying.

Seven in ten small businesses with 20 or more employees say the PPP loan is critical to keeping their business open, almost double the number of businesses with fewer than five employees that feel the same (39%).

Larger small businesses (with over 20 employees) are the most likely to have applied for and received a PPP loan (29%) compared to small (3%) and mid-sized (14%) businesses.

Of those that have applied or plan to apply for PPP funding, the primary intended uses are to pay current employee salaries (38%) or benefits and to pay rent/utilities (21%).

Less than one-tenth (9%) received a PPP loan, and 23% have either applied and not received funding or have unsuccessfully tried to apply.

Biggest Concerns for Owners
Although we prefer to speak of the country’s current situation as a time of uncertainty, the truth is it’s downright scary. In comparison, the only recent historical events that come to mind are the Great Depression and the Pandemic of 1918. The COVID-19 crisis poses health and economic challenges that we are struggling to overcome. Based on survey results, 85 percent of owners have several grave concerns related to the economy and re-opening their doors. Two-thirds of respondents rated the economy as very poor (63 percent) or somewhat poor—a 51 percent increase from the poll conducted by the U.S. Chamber of Commerce in Q1.

“We know how hard the pandemic has hit small businesses,” said Jessica Moser, senior vice president, Small and Specialty Business at MetLife. “We believe that sharing poll findings directly from small business owners provides an authentic platform to voice their concerns as well as what solutions they need most to help them survive, and ultimately thrive.”

Communicate with Employees
Business owners realize a lot depends on them making sound decisions based on government information that is subject to change, and limited availability of funds to operate at capacity. However, even though you are busy, it’s essential to call or write to your employees. You’ll want to keep them updated on the business and the status of their employment. Consistent communication will help employees feel connected and keep them engaged with the business.

To read the complete Small Business Coronavirus Impact Poll, visit https://www.uschamber.com/sbpoll.