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Nearly twenty-seven million small businesses in the United States generate about 50% of our GDP –which is why they play such a crucial role in the survival of our country’s economy. Even after the first year of the pandemic there actually was a “small business boom” according to a recent White House report. U.S. entrepreneurs applied to start 5.4 million new enterprises last year crediting emergency relief programs like the Paycheck Protection Program (PPP), that delivered $450 billion dollars to businesses.
The sector went on to see 20 percent higher growth than any year on record, with data dating back to 1948. According to an April analysis of the Quarterly Census of Employment and Wages, during the third quarter of 2021, the number of total U.S. businesses was 7 percent above pre-pandemic levels, and 74 percent of all counties nationwide counted more shops, storefronts and other local establishments than before the Covid crisis.
Navigating the pandemic as a small business has been a tall task – and the journey as either a new business or surviving business is far from over. The majority of our clients are small businesses, and we want them to flourish and survive so it has been imperative as a banker to work with them and provide financial counsel as the economic environment changes. Whether that meant adapting their business model to meet the rules and regulations that were enforced at the time – or making changes to their inventory to help sustain supply chain shortages. The businesses that survive in these tough times have learned important lessons that are now being carried into the future with new processes, streamlining and creating efficiencies.
Willow St., a local clothing boutique in Summit and Morristown, New Jersey found other ways to keep business active and provide services to their customers. When their brick-and-mortar stores had to shut down during the height of the pandemic, they increased their online sales through their website and pushed hard on social media. When supply chain issues with certain clothing lines created shortages of goods, or increases in prices, the owner found new suppliers that had insight to lines not affected by shipping delays as well as goods at the lowest prices possible. They were also able to obtain a PPP loan and continue paying employees even when restrictions forced them to stay home.
Restaurants like Quinta Steakhouse in Pearl River, New York had to adjust over the past two years to adhere to Covid restrictions and guidelines. Take-out orders were the only options for a long period of time and being a steakhouse Quinta had to figure out how to provide their high-quality meals at home. Through trial and error – changing menu items and adjusting order processes they were able to survive the pandemic. With these adaptations they are now able to run a seamless take-out business as well as its usual dine-in services with an added outdoor seating area too.
Throughout the pandemic, Cashman Landscape & Design, in East Hanover, NJ made big adjustments initially to survive. Early in the pandemic they only sent one worker in each truck to comply with social distancing. Through the process of applying for PPP loans, they learned the importance of keeping well-maintained books and having business documents organized so bankers could swiftly help in the most difficult times. Now with rising gas prices and having to drive long distances for certain jobs, they are making sure to schedule jobs within the same locations to save on fuel.
Both consumers and businesses are dealing with an unpredictable environment of rising interest rates, inflation, and supply chain issues. Yet a recent survey by ICSC, the member organization serving the marketplaces, revealed the ongoing importance of small businesses in the lives of consumers and communities in the U.S. with results indicating that 94% of all U.S. adults either shop, spend at or use the services of small businesses. 52% of consumers want to keep money local and 42% frequent establishments more now than before the pandemic.
There is no question that small businesses are the lifeblood of the economy. They make our towns and cities vibrant places to live. Small businesses were among the hardest hit during the pandemic and that’s why both bankers and consumers need to throw their support behind them.
With Small Business Month coming to a close, it’s key that we continue to stand by the small businesses that power our communities.
