Nearly twenty-seven million small businesses in the United States generate approximately 50% of our GDP – which is why they play such a crucial role in the survival of our nation’s economy. Even after the first year of the pandemic, there has been a “small business boom” according to a recent White House report. American entrepreneurs applied to start 5.4 million new businesses last year by crediting emergency relief programs like the Paycheck Protection Program (PPP), which provided $450 billion to businesses.
The sector then grew 20% faster than any year on record, with data dating back to 1948. According to an April analysis of the Quarterly Employment and Wage Census, during the third quarter of 2021 the number total US businesses was 7% higher than pre-pandemic levels, and 74% of all counties nationwide had more local stores, storefronts and other establishments than before the Covid crisis.
Navigating the pandemic as a small business has been a daunting task – and the journey as a new or surviving business is far from over. The majority of our customers are small businesses, and we want them to thrive and survive. It was therefore imperative, as a banker, to work with them and provide them with financial advice as the economic environment changed. From adapting their business model to meet the rules and regulations in place at the time to making changes to their inventory to help address supply chain shortages. Businesses surviving in these difficult times have learned important lessons that are now being applied in the future with new processes, streamlining and creating efficiencies.
Willow St., a local clothing store in Summit and Morristown, New Jersey, has found other ways to maintain business and provide service to its customers. When their physical stores had to close at the height of the pandemic, they increased their online sales through their website and lobbied on social media. When supply chain issues with certain apparel lines created merchandise shortages or price increases, the owner found new suppliers who had insight into lines not affected by shipping delays as well as merchandise at the lowest possible prices. They were also able to get a PPP loan and continue to pay employees even when restrictions forced them to stay home.
Restaurants like Quinta Steakhouse in Pearl River, New York have had to adapt over the past two years to meet Covid restrictions and guidelines. Take-out orders were the only options for a long time, and as a steakhouse, Quinta had to find a way to deliver its high-quality meals at home. Through trial and error – changing menu items and adjusting ordering processes, they were able to survive the pandemic. Thanks to these adaptations, they are now able to run a seamless takeaway business as well as their usual catering services with also an additional outdoor seating area.
Throughout the pandemic, Cashman Landscape & Design, in East Hanover, NJ, initially made big adjustments to survive. At the start of the pandemic, they only sent one worker to each truck to comply with social distancing. During the process of applying for PPP loans, they learned the importance of keeping good books and organizing business documents so that bankers can help them quickly in the most difficult times. Now, with rising gas prices and the need to travel long distances for some jobs, they make sure to schedule jobs in the same location to save fuel.
Consumers and businesses face an unpredictable environment of rising interest rates, inflation and supply chain issues. Yet a recent survey by ICSC, the member organization serving marketplaces, revealed the continued importance of small businesses in the lives of consumers and communities in the United States, with results indicating that 94 % of all US adults buy, spend or use the services. small businesses. 52% of consumers want to keep money local and 42% are visiting establishments more now than before the pandemic.
There is no doubt that small businesses are the engine of the economy. They make our towns and villages dynamic places to live. Small businesses have been among the hardest hit during the pandemic and that is why bankers and consumers need to support them.
As Small Business Month draws to a close, it is essential that we continue to support the small businesses that power our communities.