Small businesses surviving the coronavirus pandemic have relied largely on establishing a strong online presence, along with cultivating a loyal customer base, to stay afloat during the economic downturn.
To make that happen, some are revamping their business models and getting creative.
“For small businesses, the customers like to have a variety of ways to connect with them. I think all of these new ways that small retailers have served their customers are here to stay – like appointment shopping and buy online and pick up in store,” said Meghan Cruz, director of grass-roots advocacy at the National Retail Federation (NRF).
Xiomara Peña, vice president of engagement for the advocacy group Small Business Majority, pointed to California-based Fly Brow as an example of a company that decided to reinvent itself during the pandemic.
When states mandated closures early in the pandemic, Fly Brow’s owner ran with an idea from her 11-year-old son about how to keep providing their service.
“You send her a picture of your face and she will draw your outline for you on how you should do your own eyebrows. I don’t even know that she will go back to the regular format,” Pena said.
The eyebrow shaping service previously involved close contact with customers.
Peña also mentioned an exercise studio in Georgia, Kick Start Martial Arts, that ramped up its digital presence and has been reaching customers over Zoom. The studio sent out a survey to gauge how its members were feeling about returning in person when studios could reopen, and that led to the increase in virtual classes.
“Some folks have expanded, as part of their digital presence, doing more video content or offering classes, which they possibly weren’t doing beforehand,” Peña said.
Small accounting firms and law offices have also had to expand their services to retain clients. Many have shifted their focus to allow for cash flow shortages, said Molly Day, vice president of public affairs for the National Small Business Association.
Professional services companies are now more likely to offer clients payment plans ranging from three months to a year, something they weren’t doing pre-pandemic.
Some have also focused on providing help to clients struggling to navigate the pandemic.
“It’s been more of, ‘Hey, there are these loans that are pretty confusing. Let’s see if we can walk people through that,’” Day said.
But the reliance on loans underscores the bleak reality for many small businesses.
“Almost every small business has been impacted in a significant way. Successes are special and few and far between,” Day said.
With many Americans working from home, some small businesses have been able to adapt to that framework and likely will continue to keep employees home if they are able to after the height of the pandemic.
For small businesses in the retail space, however, working from home is hard to accomplish.
NRF has lobbied for another round of the forgivable federal loans for small businesses. The Paycheck Protection Program (PPP), set up to provide loans to companies with 500 employees or fewer, expired over the summer.
The PPP gave out loans averaging $107,000 for a total of about $521 billion but also came under criticism from small businesses advocates who highlighted that the program also allowed for larger businesses to benefit from the funds.
Negotiations in Congress over the next coronavirus relief package have been stalled for months, but last week a bipartisan, bicameral group of lawmakers released a package with a $908 billion price tag. That bill includes more funding for the PPP.
The industries that received the most money from the first round of PPP included health care, scientific and technical services, construction, manufacturing, food services and retail, according to the Small Business Administration.
There are 30 million small business owners in the U.S., employing nearly half of all American workers, according to data from Small Business for America’s Future.
The group found in a poll last month that 39 percent of small business owners said they won’t make it past the end of the year without further financial assistance from the federal government.
“It is still very, very challenging for small businesses right now. COVID-19 has brought on so much uncertainty, which has absolutely impacted the bottom lines of so many businesses. That has meant revisiting their business plans and even analyzing their cash flow structure, their products and services, and expanding their digital footprint so they have an online presence if they didn’t before,” Peña said.
