Small Business Recovery

Before COVID, the outlook for small business was high. However, the worldwide pandemic affected all sectors, and especially small business. Lack of customers, inability to meet face-to-face, a sudden decline in sales, health concerns, uncertainty, and many other reasons have created one of the most challenging times ever.

Business owners were left to fend for themselves while the economy dropped like a stone. Owners and staff struggled to stay afloat between virus surges, government regulations for masking and isolation, vaccination availability, and work from home rules.

Even though, Americans adjusted to the new normal while hand sanitizer and toilet paper sales flew through the roof. To stay afloat, business owners adapted and innovated. They embraced technology. Meetings were held via Zoom, GoToMeeting, and other web-based software. They invested in SaaS tools to keep going in the face of massive shutdowns. Employees worked from home, goods were bought and delivered via e-commerce, database management systems kept inventory management, communication, project management and collaboration humming along.

What we found remarkable was all this technology was provided without the price spikes we have seen recently in fuel prices and shortages of goods by disruptions to the supply chain.

Regardless, small business will claw itself toward recovery, because Americans always do. We did it after WWII and we’ll do this time. Recovery will take time, perhaps up to five years. Many may never reopen. Small businesses operate with slimmer margins than large corporations. We have less to invest in technology and less working capital. But the ingenuity we have to adapt is priceless.

Small Business Election Effect

Before the election, 81% of small businesses said that the 2020 election would affect their small business — no matter the outcome. According to the report issued by Verizon, small business owners’ concerns ranged from financial viability, social distancing regulations, and the post-COVID business climate. This was a national survey, so it doesn’t necessarily reflect the business climate here in southern Ohio…but as a nation, many of us are interdependent in many ways — whether as suppliers or consumers.

After the election, reality set in that a Biden win coupled with a sympathetic Congress is likely to mean more than COVID concerns. We are looking at the likelihood of the cost of employment rising due to an increased minimum wage from $8.70 per hour ($4.35 for tipped employees) to $15 per hour, plus mandated paid time off (PTO) for employees.

Biden also promised to modify Trump’s Tax Cuts and Jobs Act of 2017, raising the current corporate tax rate of 21% to 28%, and will likely raise the income tax rate for the tax bracket in which most small business owners operate. Plus, we can’t rule out a tax increase on income from capital gains.

Since 2017, CNBC has conducted what they call their “SurveyMonkey Small Business Survey”.  Since the high of 62% in 2017, responses had never dipped below 50 until 2020 (coronavirus). Now that Biden is President, there’s uncertainty among some small business owners, but it’s divided. Republican business owners are more pessimistic than Democratic owners and the earlier confidence from both sides stemming from the assumption that raising taxes on small business would be difficult in a Republican-controlled Senate have been dashed.

At any rate, if there’s one single thing most small business owners have, it is tenacity. Always willing to take risks to achieve their goal, the successful small business owner is so self-motivated and so self-reliant that they can survive anything that comes their way. For those with businesses hit hard by COVID, grants instead of loans would be helpful and for the smaller companies, a Godsend. 

If you have any questions or concerns in these uncertain times, please feel free to call us knowing that our conversations are held in the strictest confidence.

Small Business Report 2019

Every year around this time we deliver business news that we think our small business owners and entrepreneurs care about. 2019 has been a good year for those willing to stay on top of trends and charge headlong into the competitive landscape of the dot-com world.

In Ohio, small businesses employ over 2.2 million people, almost half of the State’s full employment. Our growth was slightly under the national average, but up from the previous year. The average small business owner that’s incorporated makes around $52,000; if unincorporated, the figure is around $23,000.

One of the fastest growing segments is the small business startup. For those startups to survive, they must be aware of and participate in today’s business trends:

  1. Automation Software: Successful business owners do more with less using automation for accounting, data entry, email marketing, customer service and customer relationship management.
  2. Smart Technology: Smaller business infrastructures, from smarter systems and manufacturing methods, the success small business owners learns how to reduce the cost of goods and services using technology.
  3. Smaller Brick & Mortar: Remote work environments give small business owners the freedom to have more hands on deck without the expense of increased office space, phone systems, utility bills, and amenities like larger break rooms and parking passes. Work-from-home employees stay in jammies and save on their commute time. They are happy, and this makes for greater productivity.
  4. Digital Access: In 2018, over 70% of small businesses used social media, websites, and email marketing to grow their business, find leads, solve problems, and deliver customer service. When the 2019 numbers come out, we expect them to have increased to 90% or above. According to Nextiva, 57% of customers would rather contact companies online than call a help desk, expect when it’s a payment issues.

In this connected world, consumers expect information at their fingertips, quick response to problems, and ease of purchase. 

Employees want casual work environments with state-of-the art technology that is fast, consistently updated, and available from almost any device.

We believe that small businesses who can best define their brand online and deliver great customer service through the use of digital marketing will be viewed most favorably and grow the fastest in 2020. We love to write about small business in our home town of Cincinnati. If you haven’t read past blogs, we invite you to visit us here or on Facebook.