How small businesses can prepare for success in a post-pandemic world
There is no doubt that the Covid-19 pandemic has impacted businesses of all sizes across the country, but not more than small businesses. In recognition of Small Business Month in May, we wanted to take the opportunity to take a closer look at efforts to help small businesses recover from the pandemic. According to National Center for Biotechnology Information, the number of active business owners in the United States fell by 3.3 million or 22% from February to April 2020. The decline in the number of active business owners was the largest on record and the related losses to commercial activity have been felt in almost all sectors.
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Companies in all sectors, especially those with some of the the biggest job declines include recreation and hospitality (48%), restaurants (48%), and taxi and limousine services (22%). Even businesses like fitness equipment, landscaping, grocery stores, and liquor stores that thrived during the pandemic will need to reassess hiring practices and supply chain disruptions that affect business owners. businesses across the country.
To help small businesses stay afloat, the federal government created the Paycheck Protection Program (PPP) under the CARES (Coronavirus Aid Relief and Economic Security) Act. As of April 2021, $ 762 billion has been distributed to qualified businesses and paid $ 5.08 billion in unemployment benefits. Today, the federal government created the Restaurant Revitalization Fund and Subsidy to operators of closed sites, two small business relief programs for restaurants and live event businesses as part of Covid-19 relief options.
Financial institutions like UMB have provided support to businesses and clients in various ways. Additional resources included postponements and modifications of personal loans and mortgages, options for repayment and deferment of credit card payments, access to additional lines of credit as well as options to increase mobile limits and reimbursement of service charges or fees.
There has also been a proactive push from consumers to support small businesses versus large businesses that have been least affected by the pandemic. According to Cox 2020 Consumer Sentiment Survey on Small Businesses, 68% of respondents say they want to support small businesses in their community, while 70% say they plan to increase their support for small businesses as Covid-19 declines.
Despite positive steps taken by Americans, the federal government, and the banking industry to help small businesses stay afloat, they still face challenges. As business slowly begins to return to normal and cities and the economy open up, supply chain disruptions take a heavy toll on small businesses that have fewer resources to absorb or push back price increases. , resulting in lost revenue, cost inflation, shrinking market share and production problems – ultimately impacting a company’s bottom line.
Additionally, small businesses find it difficult to fill vacant positions due to a variety of factors including fear of contracting Covid-19, unemployment benefits outweighing part-time or full-time pay and increasing costs and / or limited access to daycare. Shockingly, there are 15 million vacant positions in the United States, 10 million more than when the pandemic first began. Without employees to support small businesses, more of those businesses can fail.
Planning for the future
As small businesses continue to feel the impact of the Covid-19 pandemic, it’s important for owners to know they’re not alone. In addition to government support and consumer buy-in, small business owners should rely heavily on their financial advisors and bankers to help them get through these unique times. In turn, banks need to support their customers and nurture relationships by providing smart solutions to get them back on track. From assistance with loan options, cash flow management to employee benefits and everything in between, trusted advisors like those at UMB are here to serve as a partner in helping small businesses succeed in a business environment. post-pandemic world.
Jacob Hymes is Senior Vice President and Chief Small Business Officer at UMB Bank.