By: First Union | Date:
How Small Businesses Have Been Impacted This Year
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Certainly, the pandemic affected numerous businesses, across multiple industries. Its impact was felt by thousands if not millions. There were, however, certain industries that were affected to a greater degree than others. Recent research has found that among the top three categories as far as most impacted businesses were personal service, retail, and hospitality. And generally speaking, the smaller the businesses, the greater the losses—those with fewer than twenty employees tended to be hit the hardest.
Largely, it was found that the primary reason that those small businesses with less than twenty staff members were so heavily impacted was that they lacked backup cash reserves, cash flow, and capital in general. These were among the first to cut back on employee hours and lay off staff. They had to adjust their business model on the fly and figure out how to handle the stay at home culture that engulfed the nation.
And then of course with those companies whose services were hands-on—such as hair salons and tattoo shops for instance—they had no choice but to shut down altogether. This also includes businesses such as home repair, dental offices as well as spas.
While retail took a big hit, those who already had an online presence were able to keep afloat somewhat selling to customers through their website and/or social media platforms. So more so than others, they at least had a fighting chance.
What About This New Normal
Everyone is consistently talking about the new normal with which we're all going to be faced. The huge question is, are many of the smaller businesses and greatest affected industries going to be able to bounce back and survive in whatever this new normal looks like? Furthermore, what will the differences be in how they operate?
A lot of professional services for example, such as law firms and financial planners went to video conferencing—things may not revert to what they were before, and while certainly, some can adapt to this, others may not have the capacity to do so long term without making major adjustments.
Even in the case of staff and company-wide meetings, which went largely to ZOOM, odds are the "new normal" will indeed impact company operations and company cultures across the board. This could also though help some companies to cut down on costs when they need to do so.
Remote Work Reality
As we saw, out of necessity, numerous businesses had to switch to remote work culture. And as people and employers began to adapt to this, employees became more proficient at it; in fact, in many instances businesses saw productivity rise as a result of off-site working arrangements. In an attempt to recover the losses experienced during the pandemic, many business owners may stick with the remote work model moving forward.
Moving Toward Recovery
One thing that quite a few firms will likely be doing over the next few weeks and months is to upgrade their equipment and technology. As noted, to cut costs many are apt to stick with more flexible working scenarios, and to do this they have to be at the top of their game from a technological standpoint. It won't be like the virus never occurred, but it is an opportunity for some companies to grow and thrive!