Since COVID-19 first reached the United States in the beginning months of 2020, countless industries and businesses have experienced significant struggles and setbacks. One of the areas that has experienced an exceptionally difficult path are small businesses. After closing for an extended period of time due to mandatory lockdowns, small businesses have struggled to gain their footing again.
According to an analysis of COVID-19’s impact from McKinsey & Company, nearly thirty million jobs in small businesses are considered vulnerable in the current business climate. While many states have taken steps to reopen, many small businesses are still under specific restrictions from state officials about how many individuals are allowed inside at one time. For industries that rely on foot traffic, which include bars, restaurants, and retail, the current restrictions significantly reduce how much business can be completed each day.
Risk Of Downsizing
For countless small businesses around the country, the prolonged shutdown has forced them to make difficult budget cuts, which may include eliminating current positions. Leaders have been forced to either furlough or lay off both new and long-time employees, as they could not afford the salaries. While many employees who were furloughed initially have returned to work, countless others remain unsure of if they will be able to retain their job.
Risk Of Permanent Closure
Another major risk for small businesses during COVID-19 is permanent closure. According to the data by Main Street America, there are currently 7.5 million small businesses who are at risk of permanently closing in the coming month. Without the ability to reach full capacity, businesses are scrambling to find other revenue streams.
The data from Main Street America also found that companies that have less than 20 employees are at highest risk. These small businesses may not have the same resources as larger, more established companies, and may not be in the financial position to continue taking losses.
For small businesses around the United States, it is important to remain up-to-date on current events, and look for resources through this time. Learn more about the resources available for small businesses amid COVID-19 here.