Impacts on Small Business by the numbers:
Homebase reported that projected US wages lost by employees of SMB companies were $60 Billion+ per month as reported for the month of March when covid began.
However not all businesses have been equally affected, below dashboard by Wombly proves that some businesses have even benefited from the drastic cultural and consumer shift since March. The chart shows YoY variance compared to 2019.
Travel, Tourism, and restaurants have been hit the hardest with Grocery stores and the services sector seeing growth.
You can see in the chart below an analysis of spending at restaurants through 2020. The chart looks very similar to those representing restaurant and bar revenue.
This week-to-week comparison gives a clearer picture of industries that have been disproportionately negatively affected by covid vs. industries that have seen increased revenue and activity. See the massive expansion of the government sector.
And lastly, this graphic of business closures paints a clear picture of business closures by industry, which has decelerated since March.
As to why businesses could not survive the sudden change in economic activity, we have to look at the amount of cash on hand the average small business kept. This survey of 5,800 businesses points to low capital on hand, sometimes less than 15-30 days of expenses. This would lead to businesses being unable to survive a sudden closure or change in economic activity. Data by PNAS
The below chart sorts firms by January 31, 2020, monthly expenses and then tabulates the mean and median cash on hand relative to precrisis expenses. The median firm with under $10,000 in monthly expenses had 1 mo of cash on hand. For all firms with greater than $10,000 in monthly expenses, the median firm typically had less than 15 d of cash on hand, based on their pre-crisis expense levels. These firms did not have cash on hand to meet their regular expenses.
Additional tips to help overall business health by taking your business digital to help combat Covid and get ready for the 2020s:
Some of the popular ways include investing in an online store, digital technology-based POS system, curbside pickup/contactless delivery, contactless payment options, and online events.
A bookstore in Philadelphia began selling books online when their city announced their shelter-in-place. In addition to selling physical books, the store actually expanded into selling audiobooks as well. To keep customers happy the store also hosted events like happy hours and virtual events with authors over Zoom.
A wine bar in California was forced to close its doors and began to explore other options to keep its business going. The bar improved their online store and added giving customers the option to fill out a form based on what they were looking for in a wine, what their budget was and how many bottles they were wishing to purchase. The door then would pick out wines based on their preferences and send them out to them. From this online improvement, the store actually saw a boost in sales.
Why should your offline business go online?
1. Improves your company image
2. 24/7 hour availability for customers
3. Better customer support
4. Low start-up costs
5. The internet is a great place for business, leads, and marketing your business
6. Work remotely
7. Operating costs will go down
8. Target consumers from around the world and beyond local/regional demographic
9. Increase company responsiveness