As devastated as many small businesses are by the coronavirus, there are some bright spots for some small companies. Optimism is a trait that runs through many successful small business owners, and that has helped many of them get through the past few challenging months.
In the most recent MetLife & U.S. Chamber of Commerce Small Business Coronavirus Impact Poll, which surveyed businesses in July, the number of small business owners who think the national economy is good—28%—is up slightly from May’s 24%. But the entrepreneurs were even more positive about the health of their own companies, with 55% saying their businesses were in “good overall health.”
One of the reasons for that optimistic outlook was that most of the small businesses (86%) had either partially (34%) or fully (52%) reopened, which was up seven points from the May report.
This positivity was also reflected in the recently released Visa Back to Business study. That survey showed, despite the unpredictable nature of the pandemic, 75% of small businesses are optimistic about the future.
In both of these studies, many of the businesses that were doing well had taken proactive steps to pivot or otherwise change their business models.
Jessica Moser, senior vice president, Small and Specialty Business at MetLife, says small businesses need to have a plan so they can be more flexible. The Coronavirus Impact Poll showed, among other things, that 25% of small businesses had increased their use of e-commerce or digital payment options.
Similarly, the Visa survey shows that 67% of small business owners had tried a new approach, whether by launching an e-commerce site or changing their point-of-sale (POS) technology—to keep their businesses on track.
And yet another study, the UPS Store’s Small Biz Buzz survey, shows 41% of small businesses recently changed or pivoted their businesses, taking the following actions:
- 65% doing more business online.
- 28% shifting to e-commerce.
- 15% offering curbside delivery.
Much of the changes that small businesses are making are in response to changing consumer behaviors, whether that’s a preference for contactless payments or to online shopping.
Much of the changes that small businesses are making are in response to changing consumer behaviors, whether that’s a preference for contactless payments or to online shopping.
Minority reports
One group of businesses that hasn’t experienced many bright spots during the pandemic are minority-owned small businesses. In fact, according to the MetLife & U.S. Chamber of Commerce Special Report on Race and Inequality on Main Street, minority-owned small businesses have been disproportionately impacted by the coronavirus.
More minority business owners (66%) than non-minority ones (57%) are worried their businesses will have to permanently close. And they’re also suffering because they’re more likely to have been turned down after applying for a loan “to help survive the economic turmoil linked to the coronavirus” (13% of minority-owned businesses vs. 8% of non-minority businesses).
A recent study from Groupon and the National Black Chamber of Commerce (NBCC) underscores the money issues minority entrepreneurs face. Only 5% of the Black-owned businesses that applied for a Paycheck Protection Program (PPP) loan got one. In general, 63% of Black business owners say they had difficulty accessing capital compared to non-Black business owners. And COVID-19 has been detrimental to 66% of Black business owners.
Both studies reported some good news for minority and Black business owners. The MetLife & U.S. Chamber of Commerce Special Report on Race and Inequality on Main Street cites some stats from the MetLife & U.S. Chamber of Commerce Small Business Index showing a shift in attitudes toward minority-owned small businesses. The MetLife & U.S. Chamber of Commerce reports reveal a 17-point increase from the beginning of 2020 in the number of small businesses that believe minority-owned small businesses face more challenges than non-minority owned ones, from 52% in January to 69% in July.
The NBCC/Groupon report shows 75% of Black-owned small businesses have experienced business growth since the Black Lives Matter movement gained increased visibility and 74% of all small businesses believe it’s important to support Black-owned small businesses.
Minority business owners in the Met Life & U.S. Chamber of Commerce special report are facing more competition than they did before the pandemic began — 44% for minority-owned businesses vs. 27% of non-minority-owned companies. And the study from Groupon and the NBCC reveals 33% of Black-owned businesses had trouble obtaining access to various government programs.
One thing that might help in both arenas is getting certified as a minority-owned business. Certification can help businesses stand apart from their competitors as well as help businesses earn coveted contracts from large corporations, and federal, state and local governments. Learn more about getting certified.
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