In an unhealthy economy, large businesses go into bankruptcy (e.g., Hertz) and small businesses fade away, often untracked by those who try desperately to track the health of small businesses. Their debt level isn’t so large that they go into bankruptcy, the theory goes, so they just turn out the lights and disappear.
We’re going through a potentially disastrous fading away period right now. Why is this important? In a healthy economy, according to the USBA, firms with fewer than 500 employees account for about 44% of US economic activity and they employ almost half of all American workers. We need small businesses to start hiring again to keep America employed and we need them to buy goods and services to get the economy moving upward.
Yelp data indicates the biggest failure rates are among restaurants, retail, beauty, automotive, and event planning. That doesn’t mean all industries are experiencing the fade. According to one of my favorite experts, Cynthia Flanders, cleaning and delivery services are thriving, as are drive-in movies, grocery stores, landscapers, and breweries with outdoor seating.
Meanwhile, businesses are trying to survive by pivoting. Look it up – there aren’t any good alternatives to the word pivot, so, while it may be overused, it is the word that most clearly describes what many small businesses have to do to survive. Restaurants are letting employees go and pivoting to take-out dining, event planners are developing online event services, and some salon experts are making house calls. Consultants are changing industries, coaches are building up their career coaching, and dog walkers are delivering groceries.
When the pandemic is under control, what can we do to help the US economy? We need entrepreneurial people who have the encouragement, knowledge, interest and access to funds to start new businesses. We’ll need to replace restaurants when people can eat out comfortably again. We’ll need new salons, spas, and venues to relax and be entertained. Retail stores must open to allow people to shop locally again. Businesses are needed back in our communities - companies unlike any we’ve seen before, newly minted by fresh imaginations. We need people from all regions, backgrounds, and perspectives applying science to their arts and arts to the sciences. Until we are free from the pandemic, entrepreneurs and small business owners must take this time to be prepared!
We would love to help by providing encouragement, knowledge, coaching and business experience to ensure new and pivoting businesses are blossoming when this storm is over.
All the best for your success,
Mindful Profits LLC
Amanda Weathersby is an entrepreneur who sold one business to a publicly traded company and another to her partners. She, like more than 300 speakers at 100 Entrepreneur Foundation classes, also knows about business failures. Creative problem solving and predictive forecasting tools have become her passion.