How Small Businesses are Impacted by COVID-19
A global pandemic has created many issues that companies never anticipated having to encounter. Unfortunately, small businesses have it the worst. Starting back in march, all non-essential businesses were forced to close their doors in most states in the United States. Since most small businesses were not considered essential, they could not open their doors until the middle of May. For larger stores such as Walmart, they could’ve closed for a few months and been just fine, but three months for a small business is a huge lose of profit. Most small businesses rely heavily on the local economy to keep them afloat, and most did not have an online alternative for people to shop while the brick and mortar was closed. Unfortunately, even stores with a website set up couldn’t afford to keep their employees on payroll just to fill maybe one or two orders a week.
Overall, small businesses took a huge hit to their usual cashflow. Many had to spend past profits on rent or other monthly expenses just to keep the business afloat while waiting for the all clear to open again. With no revenue coming in, owners were wondering how they were going to make it another month. Even with government relief, so many small businesses were struggling to find a way to open their doors. Luckily for small restaurants, they could make pick up or delivery options so they could at least get some business. Unfortunately, a lot of people were unemployed due to non-essential businesses having to shut down, so there just was not a lot of money in the economy to go to these local places. People had to be frugal with their money, and would grocery shop instead of getting take out so they could make their limited funds stretch. Unfortunately, even many small restaurants have had to shut their doors for good, due to the fact that they were just too small to provide the necessary services to stay afloat. If they didn’t have the space to create an outdoor dining space, they had to rely on to-go orders only, and that is not nearly enough to keep an entire restaurant open for month after month.
No one expected for the world to flip upside down this year, but it teaches business owners everywhere a lesson. You always have to be prepared for the unexpected, and I don’t think you can ever have too many “what-if” plans in place, just in case something unusual strikes your business. Having to cut back so dramatically also helps create a budget with only the necessities, which will hopefully help these businesses save money even when things are “normal” again.
During these odd times, it’s more important than ever to effectively manage your cashflow, especially for a small business. Using an online accounting system, such as Paycove, can help small businesses stay on top of their accounting needs while simultaneously maintaining customer relationships. This is especially useful during a time like this since you can see where the money is coming in, what you are spending money on, and where money could possibly come from in the future all in one place. Keeping an eye on your finances is going to be the easiest way to keep your business afloat during a time that no one expected.