While the coronavirus pandemic continues to wreak havoc on economies worldwide, glimmers of hope are appearing in the United States. The federal government has released official guidelines for reopening states and counties, with the expectation that the process could begin in early May.
Businesses located in regions that have seen consistent declines in COVID-19 cases for the past 2 weeks are eligible. The caveat is that each state’s governor will be making the final decision, regardless of what the federal guidelines recommend.
Despite this potentially good news, there is still plenty of trouble brewing for our nation’s small businesses. A recent survey reveals that about a quarter of small businesses have shut down, and of those still open, 40% believe they’ll be forced to follow suit within a matter of weeks. If this scenario comes to pass, the majority of America’s small businesses will be closed in the near future.
“Regionally, small businesses in the West (where the COVID-19 outbreak was first reported) are a bit more pessimistic than others,” explains a summary of the survey published by the US Chamber of Commerce. “Just 20% agree the US economy is in good health (compared to 24% in the Northeast, 25% in the Midwest, and 29% in the South). Across industries, businesses in the service industry are deeply concerned about the economic environment.”
All told, 84% of our nation’s small businesses are worried about the pandemic’s negative effects on their operations. To mitigate the myriad issues presented by coronavirus, small businesses are looking for ways to tighten their belts and cut costs. Popular strategies shared in the survey include the reduction of operating hours, employees’ salaries, and employees’ work hours. The more drastic approach of temporarily closing the businesses has been taken by 24% of the survey’s respondents.
In the short-term, small businesses are looking for SBA disaster loans and other financial benefits to relieve the strain. More than 40% are worried about cash flow and are actively seeking strategies to improve the situation.
As small businesses survey their longer-term prospects, an increase of optimism becomes apparent. About a quarter of small businesses that participated in the survey anticipate that they’ll be hiring in the next 12 months. And 57% feel positive about the overall health of their businesses, which is impressive given the steep challenges so many of them face.
“Businesses with younger leadership are more bullish about the future,” points out the survey’s report. “Nearly 6 in 20 millennial- or Gen X-owned businesses (59%) expect next year’s revenues to increase, compared to 38% of businesses owned by baby boomers or older generations. Similarly, nearly 1 in 3 (31%) younger-owned businesses anticipate hiring staff in the next year, compared to just 10% of boomer-owned businesses.”
Regardless of where you fall in the age continuum, it’s important to keep your eye on the long game as a business owner. Carefully identify cost-saving tactics that will get you through this chaotic time while also thinking about how your business can continue those efficiencies as you pivot toward growth in the post-COVID future.