COVID-19: Its Impact on Small Businesses

By Sarah R-F.

The pandemic has been painful and difficult for everybody. Many of the people who were profoundly impacted by the pandemic were small business owners. Owning a small business is a struggle, even without a pandemic, consumers need to make a commitment to help small businesses, not just big businesses like Amazon or fast food franchises. With the on and off shutdown that California is going through, small businesses it is even tougher because they have to adjust their business each time. Not only were their businesses hurt, they even had to let the workers go. However, some financial aid has been offered by the government.

[To read more about small businesses, click here]

A small business is any business with fewer than 500 employees and $7 million in revenue a year. According to a study done from March 2020 to April 2020 by PNAS (Proceedings of the National Academy of Sciences U.S.),  they found that 41.3% of the small businesses they surveyed had to temporarily close. They also found that 1.8% of the small businesses surveyed permanently closed due to the pandemic. The remaining 55.5% percent of surveyees still kept their business completely open. A big factor on whether or not a business had to close was due to the kind of business and financially how much money they were bringing in before the pandemic hit. 

After the initial hit of the pandemic, the government, both on a national and local level, tried to give some support to small businesses. Examples are the ‘CARES’ act which was a stimulus check provided by the past president. And the Paycheck Protection Program (PPP), 5 million of these loans were sent around the country. Although these were helpful they were flawed in certain ways. According to a Brookings article, the ‘PPP’ was poorly distributed because it was through larger banks and a lot of small businesses in neighborhoods with a majority BIPOC use smaller community banks whereas small businesses in neighbors with a majority of white people use larger banks. This means that small businesses in neighborhoods with BIPOC were neglected and their requests for loans took much longer than small businesses in neighborhoods with a majority of white people. It is important to keep in mind when we think about how the pandemic has affected smaller businesses that there is this unfairness on a racial and class level of who is getting more help and who isn’t. 

I conducted my own interview with Dough Marshcke the owner of Underdogs Tres and its cousin Underdogs Too, a local restaurant chain in my neighborhood to find out their story throughout the pandemic so far. Underdogs is a sports bar-restaurant mix, Dough says that the hardest thing for Underdogs during the pandemic has been adjusting to delivery and to-go service because Underdogs is a place for people to gather. Dough notes that “the biggest concern is keeping their employees safe and the customers safe but that also means that restaurants are spending more money on safety than maybe the common retail store. The adjustment of opening and closing is both hard because they are hardly making any money and on top of that with temporarily closing and opening you have to let the staff go because you can’t afford to keep them. Then they go off and get other jobs and once you reopen you have to rehire, retrain, and it takes someone about a month to get really good at their job. So it is definitely a struggle” 

In March last year, Underdogs saw a 50% decrease in customers from their average amount of customers. Once outdoor dining was allowed they were only seeing a 35% decrease from their average number of customers. Outdoor dining was not the easiest switch though, they were able to build a parklet at one of their locations but were not able to at the other because the city wouldn’t allow it. In early April Underdogs was able to receive the PPP loan which only helped them out for a few months. They applied for a lot of loans and grants but they haven’t received anything else. 

Small businesses are so important for neighborhoods it so sad that so many are struggling with this pandemic. Whether it be financially, opening and closing, or in any other way. I encourage you to go find a small business in  your neighborhood if you are able to and go support them.