According to 2019 data from the U.S. Small Business Administration, there are an estimated 30.7 million small businesses in the United States. These small businesses employed almost 60 million individuals, making up nearly half the workforce in the country. In recent months, however, the pandemic has created numerous challenges for small businesses.
Never before has the economy been brought to such an abrupt halt, the financial impact of which is only just beginning for business owners, employees and local governments. Organizations including the Small Business of America organization, U.S. Mayor’s Council and International City/County Management Association (ICMA) have outlined helpful steps many local municipalities and small businesses are already taking to help mitigate the impact of COVID-19 and prepare for successful and safe re-openings to the public.
- Communicate openly and frequently – The need to have open lines of communication between small businesses and municipalities is crucial. New guidelines and evolving health updates that affect small businesses are being issued frequently. Whether it’s a business hotline set up for asking questions or a task force between local business and government leaders, local governments should prioritize keeping lines of communication open and providing assistance to local and small businesses.
- Utilize data to better meet small business needs – Through constant communication with small businesses, local government leaders can learn a great deal about the pain points businesses are experiencing, such as staffing, production, financial losses and more. As a result, municipalities will be better informed about the state of small businesses in their jurisdiction, thus improving their ability to provide support through federal funding requests and similar types of assistance.
- Provide aid in finding financial assistance– McKinsey reported that the median small businesses hold only a 27-day cash reserve, at most. As many businesses are still required to maintain limited capacity or stay closed completely, they are in immediate need of funding to stay afloat as the crisis goes on. Municipalities can provide assistance through various government financial assistance programs while also potentially highlighting opportunities available to small businesses.
- Work with state and local health departments – Reopening small businesses is essential to kickstarting the economy. Keeping in close contact with state and local health departments ensures government officials stay aware of COVID-19 cases and recoveries. This is critical for decision-makers who will determine when it is safe to implement reopening measures for non-essential businesses. Municipalities should educate small businesses on proper social distancing requirements as well as disinfection and sanitization methods to keep patrons safe when businesses reopen.
- Encourage support of local businesses – At the end of the day, patronizing local establishments is the primary way for municipalities to support local businesses during this time. Encouraging residents to frequent local businesses such as their neighborhood restaurants, retail shops and home services and similar actions of support can help keep local establishments stay afloat during this challenging time.
Small businesses are crucial to the financial health and overall well-being of the local economy. It is in the best interest of a community to take these necessary steps to ensure the survival and financial health of local institutions. Small businesses and local governments are adapting to the rapid change brought on by COVID-19 with potentially unknown implications for the immediate future. But with a coordinated, dedicated effort from both local leaders and small businesses, a bridge can be built to carry everyone over to the other side of this crisis.