The Chain Effects COVID-19 Will Have On Small Businesses
Chances are that right now, you are either working from home or in full-on quarantine mode. From everyone I’ve talked to, life pretty much sucks right now and I get it. Let’s do a small exercise to take your minds off things or at the least, give you something to do if you’re bored. I want you to imagine a scenario with me for a minute.
I know you have a minute because we all seem to have a bunch of extra minutes these days so work with me. You can close your eyes if you want (it may be hard to read with your eyes closed) but just imagine.
Imagine you are working a 9-5 job that you’re not all that fond of. You are daydreaming constantly, wondering if there is something else you should be doing. You decide right then that you want to start your own business, let’s say a bakery. Your grandma taught you how to bake some delicious treats and you decide to specialize in bread.
You don’t initially quit your job but wisely decide to test your recipes every night after work. You bring in your soon-to-be masterpieces to have your coworkers taste test and give feedback. People in the office love free food so they make the perfect free focus group. Week after week, you try new things and perfect the things that people love. You now have a great base of products, your delicious bread, to offer at your new business.
Friends and family start catching on and asking questions about why you are spending so much time baking each night. You tell them your plan and they immediately want to help. Most are lousy bakers so the best way they can help is by giving you money to start your business. This money will buy equipment, lease out your storefront, and all the other little costs you will have in the beginning.
The day has finally come for you to tell your boss that you will be leaving the company. You fear the worst but are met with full support from everyone you work with. It’s a joyous feeling and they even throw you a going-away party. They believe in you.
Your fresh bread immediately fills the streets with scents that bring customers in that have never heard of you. They ask you what your secret is but you’ll never tell. You build a loyal customer base and even people from the office stop in to support you. Things are looking up.
Then it happens.
A small virus outbreak in Asia spreads across the ocean. You think nothing of it at first and then you hear the news that all non-essential businesses must close in a state far away. “Surely that won’t happen here” you think to yourself. Then it does.
The news hits and you are lost for words. The governor has put in a new order that all non-essential businesses must close immediately. No, a bakery may not be essential but it is essential to you. You, your employees, your suppliers, your landlord, they all rely on that income.
Your income is gone.
You spend the next month negotiating with your landlord on how you can lower your payment. You try to get suppliers to give you a line of credit or push out bills altogether. You do everything you can to support your employees just short of bankrupting yourself. It even goes as far as turning to the government for help.
Grants from the federal government or forgivable loans get you through for a period of time but it just isn’t enough.
You have flashbacks over the last couple of years. How a simple daydream in your cubicle led to you starting a business that you were proud of. Proud of the products, proud to serve your customers, proud to see all of your hard work come to fruition and just like that it’s gone.
Let’s Be Realistic
It would be crazy to think that all small businesses are going to come out of this alive. Even with the government’s help and people doing everything they can to support local, some just won’t make it. The logistics of maintaining a business that depends heavily on the support of local patrons don’t make sense when all the shoppers are staying home.
Are some going to make it? I think so. But it will only happen with hard work and creativity. They will have to find other ways to reach out to their customers and make their products accessible. Many of the local restaurants in my area are running discounts, teaming up with delivery services, or providing car-side-to-go in order to keep their doors open. Small shops are using their online stores more. There are even group pages on Facebook so that my community can see what’s still available and it’s right at their fingertips.
If you live in Wichita then check out this Facebook group: Wichita FOOD TO GO during COVID-19.
This is where you come in, the consumer and supporter of your local friends. We’ve all had to make some difficult choices in the last few weeks but for me, this is an easy choice.
Instead of automatically placing an order through Amazon, take a little extra time to find a locally owned or small business selling the same items. Some of my favorite apparel comes from Wander North Georgia, you can check out their online store by clicking the link.
If you are doing work online then find a freelancer that has recently had their contracts cut short due to businesses cutting costs and support them any way you can. If you are looking for a graphic designer, video editor, web developer, bookkeeper, or anything else that can be done over a computer then contact me and I’ll point you in the right direction.
Or instead of automatically going to that chain restaurant you always do, find the same type of food but a family-owned place. Maybe it isn’t as convenient, but I’d be willing to bet the price is comparable and the quality and experience are far superior. If you are able, supporting these businesses is literally changing someone’s life. And honestly, it makes me feel good after supporting these companies. It feels like my contribution actually makes a difference.
Where Can Small Businesses Get Help
First off, if you own a small business then please contact your CPA and get their take. If they have none, then get a new CPA. Secondly, look to your bank for guidance. Banks have tons of resources and usually a person dedicated to helping out small businesses. It is in their best interest to help you get approved for these forgivable loans so take advantage of their knowledge.
I don’t want to give advice on an area that I’m not an expert in so here are some resources to check out:
- Coronavirus (COVID-19): Small Business Guidance & Loan Resources
- SBA Grants programs and eligibility
- Coronavirus cash: Here’s what small businesses need to know about money from CARES stimulus
The Bottom Line
Small businesses are often the best part of a community. The unique experiences and products you find there, the intimacy you get between owner and consumer, and the opportunities that they give to regular people to fulfill dreams can’t be found in a corporate setting. What isn’t often thought about is how far a small businesses’ reach can go. These businesses have employees, these employees have families, and they are all relying on that local small business in some fashion.
At the end of the day, I would much rather know my money is going to my neighbors and back into my community. I don’t feel near as good when my money is going towards some CEO’s fourth beach condo.
I want to clarify that this story isn’t supposed to make you feel any worse than reality is making you feel already. But it is supposed to open your eyes and give you perspective on the struggle of others in this strange time. I don’t know exactly what life will look like after this, but I do know that the only way we make it through is by supporting each other.
Hopefully, when you receive your $1,200 stimulus check next week you will give a little extra thought on where you spend it and the impact it could have.
If you want to read more about my predictions this pandemic will have on the global economic impact then read my article What Keeps Me Up At Night – Coronavirus & The Economy.
If you liked this post then please share by hitting the icons above and if you want to read more articles here are my latest:
- The Best Financial Advice You’ll Ever Get – *Not Financial Advice*
- Having People Work For You Is the Ultimate Privilege – It’s Time To Realize that
- Why I’m Terrible At Spending Money And How I’m Going To (Try) Fix It
- Let’s See How Much We Can Change In 8 Weeks
- Changing Our Investment Strategy – How We’re Investing Going Forward