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Not All Small Businesses Are Optimistic About Rebounding from COVID Featured

The coronavirus pandemic has wreaked havoc on almost every industry and business, both small and large. While large enterprises have been affected, small ones have suffered the most from the pandemic. All over the world, many small and medium-sized companies were forced to stop their operations, with most of them having to realign to stand a chance of surviving the harsh times. Despite the loans and other packages that the government and other institutions have released, a Wells Fargo survey indicates that small business owners continue to face many financial challenges due to the global pandemic.

According to Yelp- a crowd-sourced review site, 60 percent of business closures occasioned by COVID-19 are permanent. A year since the pandemic began, about 53 percent of all small business owners do not expect to return their operations after COVID for at least six months of 2021. According to Small Business Pulse Survey data, this is conducted carried out by the US Census Bureau in December last year. On the other hand, a survey by the Small Business Majority- an advocacy group- shows that most business owners of color will be the ones facing the bigger challenge. Most of these businesses have been hit by massive revenue losses, which means they cannot continue being solvent for long. Consequently, 32% have cut their employee hours while 24% are shutting down altogether.

According to a survey, only a quarter of small businesses are currently operating at the normal levels within the US metro areas. Smart Asset, a personal finance website in its survey on areas with the most positive business outlook in 2021, discovered that generally, things don’t look good for most areas. However, North Carolina faired better than other metro areas. In the Raleigh-Cary metro area, 37 percent of all small businesses continue to operate as they did before. In fact, over a quarter of the firms that participated in the survey said that they are looking to hire new employees in 2021. This is a good thing for employees and businesses.

But other areas are facing serious problems with regard to business operations. The small businesses in minority communities have disproportionately suffered from the pandemic. In this segment, over 70% of small businesses owned by people from minority communities reported low sales in 2020. Compared to 41% in non-minority communities, this is a bad thing considering the ongoing work to ensure a fair business environment for all. On the other hand, there are also high closure rates (36%) of small businesses in minority communities compared to 22% for the non-minorities.

Customers have not been the only problem for small businesses. Hiring has also become difficult as those that have tried to hire workers as of December last year had a hard time doing so. Over 34% of small business owners and managers found it hard to get enough skilled employees. The same challenge has faced the businesses owned by women as compared to their male counterparts. Between April and December 2020, the percentage of female-owned small businesses that stated they faced a hard time paying the basic household expenses rose from 34% to 55%. On the other hand, small businesses faced a little challenge as compared to their female counterparts. According to a survey, 87% of women noted that their domestic responsibilities impacted their work, while 72% of male business leaders stated the same.

Despite the vaccine rollout, the pandemic continues to hurt many businesses in significant proportions. Most of them have a small amount of cash left in their reserve to settle business needs such as rent, among other expenses. A majority of them complained of a lack of enough funds to pay their March rent. Sadly, most of them said they were struggling to receive funds from the federal government through the Paycheck Protection Program. This makes things worse.

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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