Watch today's episode of "Keeping Work Human," featuring three small business owners.
I’m incredibly fortunate to live in the center of Concord, Mass., a quintessential New England town if ever there was one.
Our Main Street is lined with quaint shops, cute restaurants, and a hardware store that’s been owned by the same family for five generations. And though there is a Starbucks and a Dunkin’ just outside of town, Concordians flock to the local bakery for its legendary banana muffins.
While I can’t claim to be best friends with each of the small business owners in town, I have evolved a warmth and familiarity with those whose businesses I frequent over the years. The local sandwich shop where the wait staff knows I order sweet potato fries with my turkey club. The artisanal craft store that, without fail, comes up with the perfect gift for that impossible relative. And The Cheese Shop, where they put together custom baskets of gourmet cheeses and other delicacies for special occasions.
So it’s a like a body blow for me to drive through our totally deserted town center and see the storefronts closed with no one – I mean no one – on the streets.
For SMBs, stormy seas ahead
There are so many stories coming out of the COVID-19 crisis – some inspiring, some heartbreaking, some both. But perhaps because my father was himself a small business owner, there’s a particular immediacy and relevance to the plight of SMBs during this time in history.
Writing in The New York Times, Sendhil Mullainathan echoed some of the same sentiments: “I take the plight of small-business people personally. Perhaps you do, too. My mom ran a small video store in Los Angeles for over 20 years. She survived a major economic recession, two riots that rumbled past her window and even the opening of a Blockbuster nearby.”
We are in unchartered waters these days. As a recent Wall Street Journal article noted, “The U.S. economy has suffered a body blow with no modern precedent. Unemployment, just 3.5% in February, could top 10% in coming months, higher than its peak in the 2008-09 recession. Some see it surpassing 20% soon, levels unseen since the Great Depression.”
A CNBC “Make It” article says analysts are predicting a possible 15,000 permanent retail store closures in 2020 due to COVID-19. It cites Economic Policy Institute data which says “the disease outbreak could potentially wipe out 3 million jobs from the U.S. economy before this summer.”
And a Goldman Sachs survey of more than 1,500 small business owners found more than half don’t think they could continue operating their businesses for more than three months amid the current conditions caused by COVID-19.
In an interview in The New York Times, noted restauranteur, author, and media personality David Chang gave this grime assessment: “I’m not being hyperbolic in any way: Without government intervention, there will be no service industry whatsoever. There are so many people that work for me who I am incredibly concerned about. Where are they going to get their next meal? Do they have health care coverage? How are they going to pay their bills?”
According to that same Wall Street Journal article, it’s not the depth of the recession, it’s the duration. It notes that when areas of the country are hit by natural disasters, they are able to rebound once the disruption has passed. The thinking goes that if we endure a harsh, but relatively short-lived, hit from COVID-19, SMBs may be able to hang on and recover.
But the article goes on to remind us: “This isn’t like other recessions, in which businesses and consumers are unwilling to spend. This time they are unable to spend. It resembles a natural disaster such as a hurricane that closes an entire affected region. The priority now is to avoid New Orleans’ post-Katrina fate. That requires enabling businesses, as best as possible, to hang on until the pandemic emergency is over.”
Hope, optimism, and positivity in the face of COVID-19
The article highlights the struggles of Lauren Knox, who has owned a hair salon in Huntsville, Ala., for 30 years. Her business survived the tornadoes of 2011, but can she hang on until this crisis is over? “Her hope is that when the pandemic passes, she can reopen and bring [her] staff back. But she has just $7,000 in cash on hand and, assuming she cuts all operating expenses, still has fixed monthly expenses of rent, utilities, and insurance of around $7,200.”
It’s the same story for Barb Skupien, the owner of a small jewelry store in Asheville, N.C. “With the business’s cash flow abruptly cut off, Skupien is left to wonder how long she’ll be able to cover her storefront’s rent, which is $3,800 per month. She adds that her landlord will allow her to defer that expense for two months, with the potential to re-evaluate her position down the road. Without that break from her landlord, Skupien says she could have been forced to permanently close up shop after about a month.”
Help on the way?
“Cash flow, even in a good economy is often a struggle for small businesses,” says Holly Wade, the director of research and policy analysis for the National Federation of Independent Business (NFIB), the country’s largest small business association. “But now it has turned into one of the most, if not the most, important obstacle that they face.”
There may be good news for small businesses in the $2-trillion-plus economic rescue package, according to The Wall Street Journal. While it includes money for unemployment benefits, it also includes funds to “discourage business from sacking workers. The package allocates some $350 billion in Small Business Administration loans and $500 billion in direct loans and seed money for even more credit from the Federal Reserve, all of it conditional on minimizing layoffs.”
Channeling hope in the midst of grief
In an interview with the Harvard Business Review, David Kessler – one of the world’s foremost experts on grief – noted: “We feel the world has changed, and it has. We know this is temporary, but it doesn’t feel that way, and we realize things will be different. The loss of normalcy; the fear of economic toll; the loss of connection. This is hitting us and we’re grieving. Collectively. We are not used to this kind of collective grief in the air.”
This view resonated with me in a profound way. It made me realize that the empty Main Street of Concord – a microcosm of what the nation and the world is now going through – engendered a sense of grief and loss over what had been. It made me question if it can ever be the same again. And it drove fears of what the future might hold.
Yet in the end, there is a core belief for which we can be grateful – the power of connection. As Kessler pointed out, “I do believe we find light in those times. Even now people are realizing they can connect through technology. They are not as remote as they thought. They are realizing they can use their phones for long conversations. They’re appreciating walks. I believe we will continue to find meaning now and when this is over.”
In response to the COVID-19 situation, small businesses may be able to obtain federal relief in the form of loans and grants from the U.S. Small Business Administration (SBA) through a number of legislative acts.
The SBA has established a dedicated site which provides details around the latest legislative provisions as they are passed, loan and grant details, how to apply, contact information, and additional resources to support SMBs during this unprecedented time:
- Coronavirus (COVID-19): Small Business Guidance and Loan Resources
- COVID-19: SBA Disaster Assistance in Response to the Coronavirus
- Apply for a Loan
Questions? Contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or email email@example.com.
About the AuthorMore Content by Aaron Kinne