Covid-19: Five Lessons Learned On Small Business Two Years Later
This month marks the two-year anniversary of Covid-19 bringing the world we knew to a halt. Main Streets across America have weathered one of their toughest challenges since the Great Depression and the small businesses that survived have emerged more resilient than before the pandemic.
The virus itself may be here to stay, but businesses and communities are reopening thanks in part to Covid-19 vaccines and booster shots. A full recovery will still take time, especially for small businesses across the country.
Through this crisis, we have learned a great deal about our economy and the type of Main Street we should aspire to build post-pandemic. Here are five important lessons we’ve learned over the past two years.
1. Never underestimate the resiliency of small business and aspiring entrepreneurs
The number of small businesses that were forced to close will always be one component of the impacts of Covid-19, but another part will be a story of how many found ways to survive. Whether it was tirelessly pursuing low cost capital like Paycheck Protection Program (PPP) loans, going digital, or adjusting their operations to meet the new norm of the pandemic, business owners did what they had to stay open – these stories of resiliency remain inspiring to me and business owners alike.
What was even more surprising was the number of Americans that started their own small businesses during the pandemic. Yelp data showed that between March 11, 2020, and March 1, 2021, nearly half a million new businesses opened. That was down just 14% compared with the year leading up to Covid-19.
2. Longstanding inequities still exist and are made worse in a crisis
While many businesses survived, many were forced to close in unequal fashion. The pandemic exposed just how incredibly vulnerable small business owners, especially Black and Brown business owners, continue to be. Between February and April of 2020, 41% of Black-owned businesses closed, along with 36% of Latinx businesses and 25% of women-owned businesses. For the next crisis, it is critical that all businesses have ready access to capital to weather its effects.
3. Programs like the American Rescue Plan helped countless small businesses survive the pandemic
A number of government programs like the PPP helped businesses get through the first year of the pandemic. One piece of legislation that helped them make it to the other side was the American Rescue Plan, which invested $1.9 trillion in a number of sectors, including expanding the Child Tax Credit for nearly 40 million families with 65 million children and cutting healthcare premiums for 14.5 million Americans purchasing coverage in the Marketplace. In addition, 85% of Americans received $1,400 economic impact payments. These efforts contributed to the best year of job growth on record, with 6.7 million jobs being added to the workforce in 2021.
4. Small businesses will take longer to recover from a crisis, but the Bipartisan Infrastructure Law will help
Given that small businesses – at the most – generally have a few months of cash on hand, they are going to take longer than larger companies to recover from a crisis. The Bipartisan Infrastructure Law (BIL) will help speed this recovery. This once-in-a-generation bipartisan law will give the economy and Main Streets across America a much-needed upgrade. One area where it will do this is through increasing broadband internet access for small businesses to reach their full potential. More than 30 million Americans live in areas where there is no broadband infrastructure to provide minimally acceptable internet speed. The BIL allocates $65 billion to address this, including $40 billion for a formula-based grant program to states, territories, and the District of Columbia for the purposes of broadband deployment.
5. More needs to be done in the way of fairer taxes and access to capital
During all of this chaos, U.S. multinational corporations paid less than 10% in corporate income taxes on U.S. profits. Not only is this unfair, it also makes it harder for small businesses to have the capital they need to grow their business and operate in the same space as corporations.
A May 2021 survey from Small Business for America’s Future found that small businesses are feeling the impacts of these pressures, with 76% of small business owners saying they are harmed when corporations use loopholes to avoid taxes. A global minimum tax and a fairer tax code will help reduce this disparity.
Sometimes the only silver lining to a crisis are the lessons learned from it. We should take what we know now and apply it to building a more equitable Main Street that is prepared for the next crisis we must endure.