There is no doubt that small businesses are struggling from the impact of COVID-19.
Small businesses are facing financial issues, including lack of customers and access to capital demand. Although many local businesses have shifted to takeout, delivery and remote options in order to comply with the social distancing guidelines, profit still does not come close to what these businesses made before the pandemic.
In June 2020, Facebook came out with a report on the State of Small Business, which surveyed 86,000 owners, managers, and owners in companies across the United States with less than 500 workers. According to the report, 31% of small and mid sized businesses have shut down within the first three months of the pandemic. Some of the reasons include lack of client demand, financial challenges, and need to comply with the orders of the government and health authorities.
In addition to the ongoing financial crisis that small businesses face, many are struggling to adapt digitally. One of the largest trends to emerge during the pandemic is small businesses going online. A lot of businesses that never had an online presence, opened up social media accounts and are now making them their primary way of conducting business. Social media can definitely help increase revenue however, they aren’t the solution to all financial problems. A bunch of small businesses rely on in person interactions to meet income goals.
Not only is COVID-19 affecting small business owners, but it also affects the employees. Even if businesses remain open, employees are facing economic challenges from loss of employment or fewer hours worked. Many businesses had to let go of a large number of employees due to the pandemic.
In addition to small businesses, nonprofit organizations are at risk of falling apart because of high demand for services, increasing costs, and plummeting revenues.
Nonprofits have suffered financial losses from their three main revenue sources:
While funding continues to be difficult thus making nonprofits more vulnerable during this time, there is a greater demand for these human service organizations such as food and shelter programs as people become unemployed and have households that are in need. Unfortunately, many nonprofits may not be able to sustain themselves during this crisis.
It is important to recognize that any time a business closes or has to lay off employees, it puts an entire community of people at risk, especially those who depend on these income streams/services to support themselves and their families.
Businesses should look into available relief programs and keep up to date with shifting regulations to mitigate some of the damage, and consider ideas outside of their normal methods of operation to adapt to our ever changing world.