What’s Subsequent for Small Enterprise?
When nationwide shutdowns began in March, the average small business had only 27 days of cash. Paycheck protection loans sparked an initial stage of relief. But weeks of staying home have turned into months, and companies are struggling to adapt. How are we going?
A pandemic is a natural disaster, like a hurricane that will not go away, a one-time crisis on a national level. But crises can reveal the best in us, like the incredible resilience and ingenuity of small businesses.
How companies can survive a pandemic
American entrepreneurs endure attempts at fire and use them to build a stronger future. Vodka distilleries produced thousands of gallons of hand sanitizer. Networks of student 3D printed medical masks for hospitals. Food suppliers went into full swing, and ghost kitchens occupied commercial spaces.
People took risks in the most uncertain times and survived. Research by Capital One shows that 57 percent of small businesses rate their trust as “equal to or better” than before Covid-19. According to a report by American Express, 80 percent of small businesses say they are now better positioned to face another crisis. Applications for new companies are booming. How can you think about doing something different for your company in a personal or global crisis?
How to rebuild afterwards
Unlike a hurricane or war, Covid-19 left the infrastructure and assets of American companies intact. However, many business models were destroyed. PPP loans have enabled many to keep their employees along with their years of training and experience. When the doors open, the lights come on, business can work – but with so much uncertainty, can they drive demand?
Restaurants, gyms, and salons across the country are learning how to build demand through trust. The Most Important Question to Answer: How do customers feel safe walking back into facilities? We see the evidence everywhere: brand logos for a distance of two meters, sanitary stations, staggered opening times, roadside service, online offers. At my company, Kabbage, the demand for contactless payment solutions grew 400 percent as companies took customer health precautions and moved more sales online. Like cities rebuilt after the floods receded, small businesses are rebuilding stronger, smarter, more resilient offerings that can weather another storm.
Local and city administrations also play a role. To date, municipalities have activated more than 800 programs to ensure the survival of small businesses – around 9 billion US dollars have been invested to date. The agencies have provided resource guides and guidelines for reopening and viewing clients. Some governments have directly stimulated demand: Britain has offered to pay half of the food bills. Cities can also streamline permit and property taxes: opening new businesses can be as useful as saving a business from closing. We as entrepreneurs and citizens of our local cities should advocate these programs.
How to fail well
My grandfather ran an electrical company that operated cotton mills in southwest Georgia for decades. When cotton production became less profitable and work was relocated overseas, local mills began to close. and many people were unemployed. If my grandfather had imagined his business as “electrical work for mills”, he would also have been unemployed. Instead, he re-imagined his business in light of what was happening around him. It served the local hospital, then the local schools and universities, and finally major commercial buildings across the state. Redefining his business grew something that might otherwise have failed.
Nobody knows exactly how many small businesses have closed because of the pandemic. At least 100,000 of them have silently closed forever; Some of these companies would have failed in 2020 without a national crisis. All of these losses, while individually devastating, will also redistribute resources and talent into new customer needs, new businesses, and possibly entirely new industries.
The real assets of your business aren’t freezers or space. What your customers rely on is your expertise, your experience, your reputation. I would keep calling my son’s bass teacher and my favorite raw dog food supplier (it’s Rebel Raw if you live in Atlanta) even if their employer or business went under. Find a new way to serve your customers – digital, delivery, contactless – and leverage your customer network. Does your company have a plan to come out stronger on the other side? Or does closing the doors of a dream mean an opportunity to reshape your future?
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.