As the Covid-19 pandemic raged throughout the spring closing down businesses and essentially our lives, there was always the hope that as the virus began to slowly subside, the country could rebound and open up quickly enough to avoid any catastrophic damage. And for a while, it had seemed possible. June was a good month as stores and even restaurants were opening to near or full capacity, depending on certain states. Images flooded from Georgia and Texas of packed bars, giving way to the optimism that these small businesses could pull off a miracle and survive the wretched year of 2020 even after having to shut down for nearly 3 months.

Yet as July is nearing an end, these hopes of a quick recovery are fast fading. There was a time when the general consensus was that if all things went well, at worst only 30,000 small businesses across the country would close forever by the end of the year. We are now faced with a far more daunting number.

The New York Times recently ran with an estimate that 60,000 small businesses have already closed. A Harvard study ups the number to possibly 110,000. And we still have five months to go till the end of 2020. On the pandemic front, news has been just as bad. New York has still remained mostly shut down, though they have entered a “Phase 4” that does not include restaurants opening indoor dining or the reopening of bars. California, after mostly reopening, has now shut down entirely again, forcing restaurant owners to suddenly close and dispose of thousands of dollars’ worth of food. With surging cases in Texas and Florida, many are now wondering what direction those states might take, whether to follow California or simply to weather the storm.

What is disheartening to watch is the slow demise of America’s economic backbone—small businesses started by hard-working people. These businesses made it out of the 2 to 3-month shutdown limping, wounded, yet still ready to fight to survive. The issue remains—the Covid-19 pandemic is still here, and it is still affecting businesses.

Summer is the busiest time of year for any restaurant, shop, or other small business. People are out and about looking to spend money and have a good time. Some sandwich and ice cream shops make almost all their yearly income during this time of year. Yet as the curtain is beginning to slowly close on July, none of these businesses have had the activity they usually have. They needed at least a normal summer production to give them a chance to make it till next year. Anything less, considering the 3-month shutdown, would be devastating and an effectively mortal blow. According to Quill Intelligence, consumer spending from high income earners is down almost 11% from January; for middle-income earners, spending is down 5.5%; and for low-income earners, total spending is down about 2%. People are not spending money, and that means that these restaurants and small businesses that need people to start spending are going to fail.

Even though some open states are seeing packed bars and restaurants, these sights are becoming a rarity rather than the norm they usually are during the hot summer days. People are more reluctant to go out and spend money, whether it is because of financial hardships brought upon by Covid-19 or the fear of contracting the virus. Either way, the end result is the same—small businesses struggling.

There are still ways we can help small businesses. If possible, take out as often from these places as you can. Buy gift cards, if they have any. For small bookstores and other businesses, take the necessary precautions and push yourself to visit their stores and buy from them. Call and ask if you can place orders via phone or internet, and simply pick up your products. These small businesses cannot wait much longer for government help, if there is any more coming from Washington.

The summer is already halfway gone, and these small businesses have not seen the traffic or consumer consumption close to fit their needs. Come the end of 2020, that 110,000 number could double. Come summer 2021, America’s outlook could look radically different than what it even looks like now. The ramifications will be felt throughout the country. The question now is: will our help be enough?

Michael Urpi

Sources:
https://www.mauldineconomics.com/frontlinethoughts/small-business-blues