In these unprecedented times, coronavirus has raised plenty of uncertainty and fear in regard to public health and the economy. Almost 70% of Americans have less than $1,000 in savings, and many of the 30.7 million small businesses are struggling to stay open or finance their operations until the outbreak has passed. It’s highly likely that 54% of the small businesses still open will have no choice but to close their doors in the coming weeks. How are small businesses working to stay afloat and not suffer economic collapse during this time? Here’s how small businesses are handling the 2020 pandemic.
Machine Fabrication And Repair Services
As many manufacturing companies are still deemed essential businesses during the pandemic, it’s critical for their equipment to stay properly maintained. Any potential issues need to be able to be addressed quickly in order to keep up with supply and demand. As of right now, machine fabrication and repair shops are working hard to help these facilities stay in production as much as possible. However, this may be a struggle as the manufacturing industries work to resolve the issues they face with their supply chain management and finance allocation.
However, this may change in the near future as the effects of the outbreak take their toll on the economy. Some manufacturing facilities have closed their doors already due to insufficient cash flow. If others follow suit, the machine fabrication and repair shops may have to finance their small businesses to stay afloat until the pandemic has passed. But for now, there appears to be no threat to their financial situation and these small businesses are conducting business as usual. Once the pandemic is over, their economic situation should be stable and they may even see an increase as demand rises.
Those in the dental industry are particularly at risk for contracting and spreading coronavirus because of the close proximity to saliva, droplet, and blood exposure. A dentist for children can put this age group at greater risk because younger patients can be more vulnerable to contracting the virus. Currently, most dentist offices are closed to the public and certain services are only offered on an emergency basis. Procedures such as getting braces are postponed for now, but infections and extractions are still treated with precautions set in place. Patients are encouraged to call first to schedule treatment and complete a coronavirus screening assessment prior to coming into the dental practice.
As a result of the pandemic restrictions, dental practice owners are struggling to meet their obligations with third-party vendors, landlords, and finance lenders. One thing that can help these small business owners is to review their contracts with a lawyer and look for a force majeure clause. This clause identifies any events or circumstances that are beyond the control of the parties involved. The COVID-19 pandemic could be considered one of the unforeseen circumstances, and it can make the performance of a contract impossible to adhere to. The force majeure clause would be able to release or suspend a party from their duty to meet their finance contract obligations without liability.
If a contract can’t be temporarily excused because the pandemic isn’t covered or there’s no force majeure clause, dental owners can still negotiate non-performance accommodations with vendors and landlords. They may be sympathetic due to the financial challenges they face as small business owners. Even once the outbreak restrictions have lifted, dental practice owners will still most likely remain struggling with financial obligations for several months. Patients will still be financially challenged themselves and may only seek emergency treatments until the strength of the economy is fully restored.
The effect of the pandemic on the plumbing industry has been profound. Local plumbers are still considered to be an essential service, but small business owners are worried about how to keep their workers and customers from getting sick while work is being performed. They’ve raised legitimate concerns regarding the potential transmission of the virus while drain cleaning water and plumbing systems and have taken measures to use protective equipment as much as possible. One of the biggest concerns is ensuring finance capital is available in order to bridge the economic challenges during this health crisis.
The U.S. government has stepped in to provide relief for many small businesses, including those in the plumbing industry. Approximately $350 billion has been allocated by the Coronavirus Aid, Relief, and Economic Security Act to keep small business employees employed during this time. An initiative known as the Paycheck Protection Program is available for plumbers and other small business owners. This initiative offers finance loans that are 100% federally guaranteed. Plumbers can also apply for a low-interest Economic Disaster Loan for up to $2 million dollars which features a $10,000 advance to be used for providing sick leave, maintaining payroll, and meeting financial obligations.
Ensuring that plumbers navigate economically through the health crisis is critical. After the outbreak has passed, these small business owners will be called upon to repair and maintain water systems in buildings that haven’t been used in months. These systems will require purification and testing to make sure any contaminants from stagnant water are removed. How well they will be able to perform these functions will depend on whether they can get the necessary supplies and equipment from vendors who have been deeply impacted by the pandemic and trying to recover themselves.
Home Health Agencies
There are currently 3.3 million home health workers on the front line to take care of the people most vulnerable to the coronavirus outbreak. However, home health agencies are struggling to provide their workers with personal protective equipment and dealing with worker shortages in the hardest-hit areas. Elderly patients may find it difficult to be able to hire a caregiver during this time because of the strain on the healthcare system. In-home caregivers are being carefully screened for the virus before being able to enter a client’s home. People with disabilities are vulnerable to being left without the assistance they need if there is no caregiver available from the agency as the demand outweighs the supply of human resources that are available.
From a finance standpoint, home health agencies are unlikely to see any effect from the economic slowdown. The industry itself is essentially recession-proof. However, small business health care businesses might see changes take place once the outbreak has passed as major industry investors alter their focus on where to finance. It’s possible to see smaller agencies integrate into larger organizational systems to restructure service efficiency and reduce overall finance costs. Investors will be looking for investments that provide innovative solutions to meet the overly increasing demand for the aging population.
Health And Fitness Companies
Smaller health and fitness companies are reinventing the way they do business as a result of the outbreak. Gyms and studios have been forced to close, so these small business owners are getting creative with their services. Many are offering online video classes for workouts in exchange for the monthly subscription they would normally receive. Some health businesses are selling nutritional food products and supplements such as wholesale Maqui Berry powder that can be shipped directly to customer’s doorsteps. Small businesses that sell gym equipment are selling out of inventory and unable to meet customer demand so they must offer other services to maintain consistent cash flow.
Even though these small business owners are finding innovative ways to conduct business, they have still taken a heavy hit with the finance of their operations. Many gyms have had to lay off workers and some are still scrambling to stay in business. In order to remain relevant, these businesses will have to adapt to more creative solutions or they’ll be forced to close their doors permanently. Many of these businesses are considering using these virtual models of providing goods and services long after the pandemic has passed.
Landscape And Tree Services
The landscape industry is still considered to be an essential service but is facing many financial challenges because of the pandemic. Approximately 21% of tree service owners have chosen to close their doors to eliminate the potential of spreading the virus even though they have the ability to remain open. This could lead them to severe finance losses the longer the pandemic continues. Another 22% of these small businesses are seeing a reduced number of inquiries for services such as crown cleaning because property owners are cautious about the risk for exposure.
On a positive note, approximately 42% of businesses are currently unaffected with the finance of their small businesses. This may be due to a build-up winter cash funds that can offset the number of limited inquiries. However, these reserves are being depleted rapidly and may affect stability in the near future. But for now, the landscaping and tree services that remain open are staying calm and taking measures to keep their workers and customers safe during the pandemic.
Some of the measures being taken to make sure customers are safe to include keeping crews outside and performing consultations by phone or video. If a person must come out to make an assessment for a quote or estimate, they do so while keeping a safe distance from the customer. When sending people to job sites, crew members are driving individually rather than riding together in a company vehicle. Employees are encouraged to not come to the office and equipment is being regularly sanitized. Crew members are provided with personal protective equipment and are expected to follow proper handwashing procedures.
As more and more people are quarantined inside their homes, online stores are likely to see a boom in business. However, they must still tread lightly with their branding in order to not offend or be insensitive to their target audience who are struggling financially due to the pandemic. E-commerce brands must look to earn a customer’s trust and provide value. Meeting customer demand can be difficult as some products and services are in high demand. Small e-commerce businesses also have to look for cost-effective ways in order to deliver products and services in a timely manner.
Many of these small businesses are relying on computer algorithms and technology to limit ordering for certain high demand products such as toilet paper to prevent hoarding. Even with the limitations, many of these businesses are thriving during this difficult time because they accept digital payment methods that align with social distancing restrictions. With the new shopping habits of so many who are stuck at home, e-commerce businesses should continue to see a rise in consumer activity even after the pandemic has passed.
Right now, the e-commerce businesses that are seeing the most success are the ones that are focused on providing relevant information to their consumers rather than hitting them hard with sales campaigns. These businesses are working to be empathetic and eliminating any appearance of trying to take advantage of the pandemic situation. E-commerce brands are turning toward the use of content to show consumers how to use their products rather than directly asking them to buy. Mentioning coronavirus directly in marketing efforts can be detrimental and should be avoided unless there is a reference to creating a positive impact on combating it. Many e-commerce brands are seeing success in their marketing campaigns especially when they are in tandem with charitable organizations that are providing much-needed assistance and relief.
Coronavirus has taken a serious toll on small business finance and operations. Even after the outbreak has passed, it will take some time for these businesses to fully recover, if it hasn’t wiped them out already. The way business will be conducted after the outbreak will most surely change, but how much change will occur is yet to be determined. Small businesses may be struggling now, but there is hope that the tides will soon turn economically for the better. The pandemic is definitely changing the way business is conducted throughout various industries, and this could be a significant positive effect on our nation’s economy far into the future.