Over the last several weeks, Michigan has seen an increase in the number of COVID-19 cases; concurrently, vaccine rollouts continue to accelerate. In fact, nearly 3.0 million Michiganders have been vaccinated. The state’s goal is to have 70% of all residents 16 and older fully vaccinated by the end of this year.
Despite the ongoing battle with COVID-19, vaccinations are providing hope to many for a return to some type of normalcy.
Unfortunately, the pandemic has had a longstanding economic impact on the local, regional and national economies and its overall psyche.
What about small businesses? What is the overall outlook and how should they adapt in an ongoing and hopefully, a post-pandemic world.
When it comes to entrepreneurship, small businesses have been adversely impacted by COVID-19 and, in particular, African American businesses.
According to Bloomberg, approximately 17% of small businesses shut down three months after COVID-19 hit in March, 2020. African American businesses have had a disproportionately higher closure rate, 41%, compared to all businesses.
Many businesses have been forced to shut down entirely and those that remain open now must absorb lower revenue streams (for example in the restaurant industry, carryout and curbside only) and incremental costs due to adhering to COVID operational standards to conduct business safely.
And think about the impact on Detroit’s entrepreneurial and specifically, the African American business community.
According to the U.S. Census (2012), the city has approximately 62,000 small businesses, making it the 4th largest in the country. And with nearly 51% of these businesses being minority-owned, the economic impact borders on devastation for black businesses within the city’s already fragile economy.
What can we expect for the balance of this year?
While economists are projecting an economic recovery this year, the challenge remains significant for small businesses.
The fact is many will not survive this year because of the lack of revenues resulting from lost customers, impacted employees, and some cases, inertia or an inability to adjust to a changing market.
But, what should you be doing now to prepare your business for recovery and sustainability?
- Explore funding options: Understand financial gaps and develop a plan to identify revenue streams to fill those gaps. Meet with a financial advisor to understand traditional and non-traditional funding options, including grants, crowd funding opportunities, et. al.
- Don’t push or overextend with credit resulting in increased debt: Establish a relationship with a banker or a trusted advisor. Revisit the financial plan for the business. Now’s not the time to take on more debt, but focus on fiscal responsibility while eliminating unnecessary expenses.
- Modify, adjust business model: Due to the pandemic, it’s essential to understand business has evolved. The way business was conducted has changed for good. Now’s the time to look forward, and not back. Ask yourself about how your business is leveraging new technologies, and are they now integrated into your business model?
- Leverage Your Network: Review your marketing plan and focus on cost-effective measures, including social media, word-of-mouth and community engagement. Leverage your network by encouraging each other to support each other’s business.
And take advantages of various events such as the 2021 Small Business Workshop Virtual Series which is free will be held virtually and weekly in May during National Small Business Month.
Now’s the time to focus on business recovery while bracing for what will still be challenging times ahead.
Mark S. Lee is Founder, President & CEO, The LEE Group, and can be heard “In the Conference Room”, Sundays, 11 am, on 910am. He hosts the “Small Talk with Mark S. Lee” podcasts at leegroupinnovation.com.