The COVID-19 pandemic has drastically and quickly changed ways of life for virtually everyone around the world to some extent. It caused them to practice social distancing, wash their hands more thoroughly and get accustomed to wearing masks.
The public health threat also allowed many people to work from home for the first time, and some will do so for the foreseeable future.
There is also a clear link between small businesses and COVID-19, especially as authorities forced non-essential enterprises to close temporarily and mandated that all others follow new health and safety procedures.
Many small companies faced challenges before the pandemic arrived, and COVID-19 only exacerbated them. If these things sound familiar, there’s hope. Here are seven relevant small business struggles and tips for handling those obstacles:
1. Cash Flow Shortages
The difficult thing about the novel coronavirus’s unprecedented nature is that no one knows how long it will threaten society. In the early days of the public health crisis, many people hoped the virus would not spread, or that it would prove a relatively short-term problem. Most small business owners know it’s wise to save for emergencies, but they don’t anticipate these dire situations to last for months with no end in sight.
A survey of more than 5,800 small businesses began examining the severity of that reality. Researchers polled participants in late March and early April. One finding indicated that 75% of enterprises only had enough cash on hand to last two months or less. Relatedly, 72% of businesses expected to keep operating through December if COVID-19 only lasted a month, but the segment dropped to 47% if it persisted for four months.
If your business is going through cash flow problems, consider applying for some available loans. The Small Business Administration (SBA) has several temporary COVID-19 assistance options to explore. That organization formerly offered the Paycheck Protection Program. This initiative expired, but other supports remain in effect. You can also reach out to your credit card provider. Some allow people to defer payments or pay less during the pandemic.
2. Owners’ Increased Stress and Worry
Occasional periods of increased stress and worry are natural for small business owners to experience.
However, coronavirus-related factors made new concerns emerge that pushed stresses and uncertainties to new heights and introduced some you probably didn’t expect to have. Perhaps you’re worried about how to deal with the news that an employee of your store tested positive, or you’ve had heightened stress due to customers ignoring your requests to wear a mask.
A May 2020 poll compared small business owners’ stress and worry levels before COVID-19 and during it. Both male and female participants reported rises in those things during the pandemic, but the effects were especially severe for women. Consider that 38% of females experienced daily stress in pre-COVID times, but 62% did at the time of the study. You cannot realistically expect to eliminate all causes of stress and worry. However, self-care is the first step to managing them.
Amy Ritsema, the co-owner of a corporate wellness company, explained, “We’re in crisis mode. We’re not thinking about ourselves. We’re thinking about everything else. If you’re not taking care of yourself and your own personal stress and your personal well-being, your leadership skills are not going to be top-notch. You have to be the best person yourself and take care of yourself so that you can be the best for your employees.”
Basic things like sticking to a regular sleep schedule, eating healthily, exercising and maintaining positive relationships can help you keep stresses and worries at bay. If those steps don’t do the trick, talk to your doctor for further guidance. Consider that by investing in yourself, you’re investing in your business.
3. Decreased Revenue
A drop in revenue is another issue related to small businesses and COVID-19. It could happen for various reasons. Perhaps you own a small cafe and had to dramatically reduce the number of diners accommodated at once due to social distancing measures. Alternatively, maybe you only have a brick-and-mortar store and suspect online retailers took a chunk of your business as more people chose to stay at home.
The results of a survey published in May 2020 indicated that 62% of small businesses saw a general decrease in revenue. Only 12% reported revenue increases. Moreover, 47% said their revenue losses totaled 10%-30%, while 41% indicated they surpassed 30%. Another 13% responded that they had complete revenue losses.
If a dip in revenue hurt your business, or you fear that it might, start by being as proactive as possible. How could you diversify your revenue streams and meet new customer needs? Start by asking them directly about how your company and its offerings could make these tough times a bit easier. What don’t you offer that they’d pay for and appreciate if you did?
You might even explore if the fact that many transactions happen through the internet now could boost profits. Some farmers did that by participating in virtual markets before opening in person after the pandemic. Customers could browse and shop for fresh produce online, then request it for delivery or a curbside pickup option.
4. Supply Chain Difficulties Hindering Operations
It’s safe to say that small business struggles connected to the novel coronavirus span all industries. However, some sectors find themselves much harder hit than others. Many travel brands wonder how to entice people back to their businesses.
In Ireland — a country famous for its vibrant pub culture — publicans cannot reopen unless they serve substantial meals with customers’ drinks. Many are not equipped to do that and decided serving food is prohibitively costly.
Industries that heavily rely on goods shipped from elsewhere faced obstacles, too. For example, 30% of U.S. building supply imports come from China. Since COVID-19 originated there, construction companies were among the first to experience severe supply chain slowdowns. Even Amazon came under pressure, too. Supply chain difficulties meant that many people who shopped there in March 2020 noticed more sold-out items or found that deliveries arrived late.
Returning to small businesses, specifically, a survey of more than 100,000 owners in the United States examined COVID-19’s impact on supply chains, among other things. The results indicated that 44.9% of overall businesses reported supply chain disruptions. However, the total climbed to 65.8% in retail, 61.4% in health care and social assistance and 49.6% in manufacturing.
Protect your supply chain by communicating with your usual suppliers and determining whether they have the resources to fulfill your needs for the foreseeable future. When necessary, investigate how new suppliers might help fill the identified gaps. If supply chain problems affect customers, be honest with them about possible delays or prolonged product outages. Let them know everything you’re doing or have done to minimize issues.
5. Concerns About a Second Wave
Many discussions about the coronavirus pandemic center on if a second wave might happen and when. The results of a July 2020 poll of small business owners found 65% of them worry about closing again or staying nonoperational due to a second wave occurring.
There are several small business struggles associated with a second wave. For example, what if you spend a significant amount of money on doing everything required to reopen safely, but a government decision ultimately deems your entire sector unsafe to stay open after several outbreaks happen in your industry? Many bar owners found themselves in that situation when cases spiked in some regions of the United States, and health officials linked some to that business type.
July’s survey showed entrepreneurs taking various actions to safeguard their companies as much as possible if a second wave hits. The most common decision — cited by 32% of respondents — was to purchase additional supplies or products. A quarter of those polled reported making improvements to their e-commerce or digital payment options.
You can follow suit by recalling the most prominent difficulties faced during the earlier phases of the pandemic. What issues cropped up that made you scramble to accommodate customers and employees? What have you learned since then that could make you stronger moving forward?
6. Consumers Making Lasting Changes to Cope With Persistent Anxiety
Even people who formerly described themselves as level-headed and unflappable have plenty of reasons to feel edgy now. Many worry about loved ones falling ill or becoming sick themselves. Job losses and trouble paying rent or mortgages are genuine concerns for some households. As people try their best to deal with the way life is now, many shifted their spending preferences and patterns.
A look at global consumer trends previewed what some small businesses should expect in the coming months. For example, 52% of the research participants said they would change how they shop, with 44% deciding to buy groceries online more often. Moreover, 46% said if they chose to eat out, they’d prioritize the dining establishments with layouts that give the most space between diners.
Nervousness about the future is a common thread between consumers, small businesses and COVID-19. Enterprises can give themselves the best chance of success by first proving to customers and employees that it’s safe to spend time at a location. Publishing blogs about new safety guidelines or even shooting short videos to show some of the safety procedures in action are good starts.
Next, business owners should remain sensitive that many people conclude that the safest option is to hold tight to their financial resources in case their situations worsen. Offering freebies for loyal customers, launching limited-time sales and providing discounts for people who buy in bulk are all things a business could do to show customers they’re still spending their money wisely and can feel good about doing it.
7. Customers Not Knowing About Reopened Businesses
With so many businesses opening in stages and some still closed, it’s difficult for consumers to keep track of whether they can now buy things from the places they frequented before the pandemic. A survey also found that 39% of small business owners feared they would not generate enough profits to make reopening worthwhile.
However, the study’s respondents planned to utilize various tactics in the first month of reopening to increase customer awareness and interest. Email marketing was the most popular choice, with 54% deciding to use it. Another 43% would rely on sales or promotions to inform the public that their business is open again. Only 9% said they wouldn’t do anything to advertise the enterprise in the first month of reopening.
After analyzing your company, it may become apparent that offering your business now the same way you did before the pandemic is no longer feasible. A husband-and-wife team who owned a Texas hair salon came to that conclusion. Their lease ran out in the middle of the COVID-19 chaos, and they decided to pivot by moving the business to a secluded residence they own near their primary home.
Besides cutting hair on a smaller scale by only serving one or two people at a time, the entrepreneurs capitalized on the property’s natural beauty and created meditation and wellness spaces. Take inspiration from their example and realize it’s okay if your business model changes to adapt to the times. If it does, ensure your communications with customers mention what’s new. Highlight that you’re open again and have expanded your services or changed your location, for example.
You Can Tackle Small Business Struggles
Many of the difficulties mentioned here have probably weighed heavily on your mind over the last few months. Take the suggested solutions and tweak them to match your needs. There’s no universal fix for small businesses in these strange times, but now you have several ways forward toward a brighter, more resilient future.