Pandemic permanently alters small business landscape

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Even as states reopen, it’s becoming increasingly clear that the coronavirus pandemic has permanently altered the small business landscape. More than 100,000 businesses have already shuttered for good and OpenTable estimates that one quarter of U.S. restaurants will not reopen. Owners hoped they would be allowed to fully restart operations once lockdowns lifted but instead are being told to operate at 25% or 50% capacity, or not yet open at all.

The Paycheck Protection Program loans were meant to act as a stop gap for small firms and keep them afloat in the interim, but the program has been plagued by constant rule changes and a lack of transparency. Owners are passing up on the loans over fears that requirements will change and it won’t be converted into a grant.

Despite these perilous circumstances, small businesses and their workers are feeling more optimistic, according to LinkedIn’s latest Workforce Confidence Index, a biweekly snapshot of workers’ sentiments about their job security, finances and career outlook. But their level of confidence largely depends on where they are located, with those in the South feeling the most optimistic and those in the western region, where states have been slower to reopen, lagging behind.

Keep reading for the latest updates, conversations among fellow business owners and resources to help your firm.

Latest Developments

• The Congressional Budget Office predicts that U.S. GDP will drop 38% in the second quarter this year.
• The World Health Organization is warning that the coronavirus “may never go away” and it will take considerable effort to get the pandemic under control. 
• FedEx is limiting the number of packages that dozens of retailers can ship from certain locations to keep its system from being overwhelmed.
• Amazon upended the retail landscape, pushing forward consumer’s adoption of e-commerce. While malls and brick-and-mortar shops were still succeeding before the pandemic, the industry is undergoing an e-commerce revolution.
• Restaurants, including some large chains like Starbucks and Applebee’s, are asking their landlords for rent reduction but most are not receiving it.
• Grocery store shelves are empty, yet farmers and ranchers are plowing over crops and euthanizing animals. What is leading to this dichotomy? And will our small producers survive the pandemic? I spoke with three farmers about the bottlenecks they’re facing and what the future of America’s food supply chain could look like:

Conversations For You

• One of the things I have missed most during lockdown is exploring my local bookstore and getting their recommendations on what I should read next. As states reopen, will the resurgence that indie bookstores were experiencing before the pandemic be enough to keep them afloat? Booksellers and indie publishers are talking about what the pandemic has been like for them and what the future may hold.
• Restaurants have had to rely on delivery as their sole source of income during the shutdown, and even though states are reopening, it will likely continue to be a key driver of revenue going forward. But the delivery apps that restaurateurs count on to reach customers are taking a sizable chunk of the profits. Restaurant owners are describing how they’re combating the high fees and what it means for their industry. 
• Universities are a key driver of economic growth for the towns in which they reside, bringing in industries and students and creating a network of businesses that cater to them. As colleges consider staying closed in the fall, what will it mean for those local economies and the businesses that occupy them? Entrepreneurs in college towns across the U.S. are giving their take.

Resources

• Basketball legend Magic Johnson is providing $100 million in loans to minority- and women-owned businesses.
• Own a family business and wondering who will take over next? Harvard Business Review has a guide for preparing the next generation.
• McDonald’s released safety protocols for its franchisees to follow as they reopen.
• New York City is limiting the fees delivery apps can charge restaurants during the pandemic. Under the new rules, apps cannot charge more than 15% per delivery order or more than 5% in other fees. 
• The CDC has released further guidance for businesses looking to reopen. While voluntary, the guidelines are designed to keep workers and customers safe.
• The Hispanic Small Business Center is giving out $10,000 grants to Latino-owned businesses.
• Wisconsin small businesses with fewer than 20 employees are eligible for state grants of up to $2,500.

Something Good

• Readers are likely not aware that I have a love for, perhaps even an obsession with, goats. I dream of having a pygmy goat. For all you other goat fans out there, enjoy this video of 200 of them out for a casual stroll through a San Jose neighborhood. If goats don’t do it for you, perhaps this running group of hogs (which I just learned is called a ‘passel’) will.