America’s small businesses have been particularly hard hit by COVID, the impact of which has been unprecedented in the sector. Early statistics from the National Bureau of Economic Research are showing that as many 22 percent of small businesses have closed.
“The average small business doesn’t have a rainy day fund,” says Jim Altman, Middle Market Pennsylvania Regional Executive at Huntington Bank. “They don’t have a tremendous amount of liquidity to fall back on in the event of an emergency.”
But as we enter what seems to be the final innings of the pandemic, small businesses have also proven their resilience through creative pivots and leveraging community resources. And there’s some speculation that there could be a post-COVID boost in small business creation.
Smart Business spoke with Altman about small business survival tactics and how the COVID disruption could lay the groundwork for future ventures.
How have small businesses pivoted to stay afloat?
Small businesses have had to focus on client preference in order to keep their heads above water. A good example of this has been restaurants and grocery stores offering pick-up or delivery services so that they could fulfill orders for customers concerned about in-store shopping and dining.
A lot of small businesses have looked at ways to get their message out with social media, and have leveraged digital options to keep business flowing. Restaurants, for example, have turned to their websites to highlight their offerings, and many have used smartphone apps to arrange for curbside pickup and even touchless payment.
There’s been a significant acceleration in digital migration during the pandemic by many businesses. It will be interesting to see which digital changes small businesses keep around well after the virus is contained.
What resources are available to help minority-owned businesses and startups?
A good place to start is the U.S. Small Business Administration. The federal government provides a fantastic startup process for just about any venture.
Some banks might have programs focused on minority-owned small businesses, as well as those owned by women and veterans. Those could include access to capital, and education and financial tools for small businesses and startups that could help with the creation of a business plan and generating cash flow projections.
There are also local nonprofits that can help. For example, in Pittsburgh, there is the Urban and Community Entrepreneurship Program at the University of Pittsburgh, the Center for Women’s Entrepreneur at Chatham University, the Pittsburgh Technology Council, and the African-American Chamber of Commerce of Western Pennsylvania.
What should someone looking to start a small business today consider?
Now is a good time to start a small business as long as it’s done correctly. That means taking the time to research — understand the market, demand potential, competitive landscape, and how that product or service will be delivered while COVID is still a factor. It’s also important to write a strong business plan and find the right legal and accounting advice.
Another critical component of a successful launch is funding. Entrepreneurs should take time to interview banks, and possibly look for investors or crowd funding opportunities. All of this should be done before a marketing plan is developed and the business is opened.
While the COVID crisis over the last year has made operating difficult, it’s also created opportunities. Many small businesses are getting their start during this challenging time. In some cases, people have used this disruption to consider what’s really important, what drives them, what they’re passionate about, and many will start businesses that not only fulfill them personally, but meet needs within the community that were uncovered during the pandemic. These gaps can be filled by a small business owner who can leverage the support systems throughout their community to help get that dream started and really make a difference.
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