During this challenging time of the Corona Virus pandemic, I believe it is important to focus on the massive changes occurring that will leave permanent marks. The entire world is in lockdown for the first time in many decades, and it is an uncertain time for the government, the economy, and the people. There are people and businesses that are lucky enough to be least affected because of their tendency to be based largely online or remote. However, there are massive shutdowns that have affected small businesses all over the world. Small businesses are suffering hugely as a result of the Corona Virus pandemic, which has forced shutdowns to all non-essentials.
I will outline in this post how small businesses can try to minimize their losses and try to manage most efficiently during this shutdown to overcome the non-essential shutdown. Karen G. Mills, who has been advising policymakers on aid options, is offering guidance to owners on the brink of ruin. It is estimate that the economic blow during this pandemic will be much harder and harsher than that of the recession of 2008. It is estimated that many small businesses will not be able to surpass one month during this temporary lockdown and will be forced to shut down. The reasoning for this is because daily cash flow is needed to keep small businesses alive, and managing during a crisis like this is not training many of these small business owners have received.
The government will be offering interest free loans and work to include new financial technology companies, but that may not be enough for all businesses. In order to stay afloat, small business owners should consider applying for the small business administration loans. Some states are offering disasters loans and some are offering aid packages, small businesses should consider these options to help them ride out the lockdown wave during these few months.
Small businesses should also explore private sector programs and fintech products. For example, Facebook has stated that it would be offering $100 million in grants to small businesses in need at this time. Many other companies such as Kabbage and Fundbox are also in the process of lending out loans to small businesses.
If loans will not be enough to stay alive in the business, then it is important to renegotiate terms of contracts and debts if possible. Owners should ask landlords for leniency on their rent, and other bills due. Banks should also be able to temporarily defer interest payments on outstanding debts as well.
It is also an option to reach out to the masses through social media and ask for support. Often times concerned consumers and loyal customers will be willing to purchase through online transactions even if you do not typically run your business online. Small business owners can also ask consumers to purchase gift cards during this time for future purchases or for gifting to others, which will not be losses on the consumers end either.
As stated in the article, “Small businesses are the very fabric of our communities, all across the country.” It is important to properly manage these businesses at this time so that they do not have to permanently close.
This article related closely to our course material in many ways, and I chose a topic that could be found throughout many of the chapters we studied. I thought it was important to focus on a topic that is most relevant to our economic climate at this time. The relationship of small businesses and government was studied in this course several weeks ago and I believe we are now really seeing the importance that the government must give to these businesses, but also how vulnerable small businesses are to the government. At this time, small businesses will be relying on the aid of the government to stay afloat.
This article also outlined how a business can use technology to further enhance its operations and how important it is for all levels of businesses to inhibit technology into their daily routines to stay alive during times such as these. Businesses that have kept majority of their options and operations online are least effected during this Pandemic, but the businesses that opted to stay as an in-person experience only, with employees who reported daily to their worksites are most effected. I believe after this pandemic ends, all small businesses will learn how to properly manage and train their staff and employees to deal with issues such as this in better usage of technology so that shutdowns do not affect their business in the future.
Kost, Danielle. “How Small Businesses Can Survive the Coronavirus Outbreak.” HBS Working Knowledge, 20 Mar. 2020, hbswk.hbs.edu/item/how-small-businesses-can-survive-the-coronavirus-outbreak.
“Help Local Businesses during the Coronavirus.” Shore Daily News, 13 Apr. 2020, shoredailynews.com/help-local-businesses-during-the-coronavirus/.