(Kimberly James) – The coronavirus pandemic has made organizations across the world, large and small, reconsider how they do business.
But while larger corporations have money, flexibility and options, small businesses are struggling to make it without those freedoms.
Sam Males, state director of the Nevada Small Business Development Center, told The Center Square that small businesses in Nevada, and across the nation, have been hit hard; the full extent of the damage probably won’t be known for a while.
Males said he’s heard estimates placing as many as 40 to 50 percent of small businesses as we know them today out of business in six months. Some, he said, will simply run out of cash. Others may find that it will be difficult to keep their doors open for much longer without any assistance.
A National Bureau of Economic Research study reports that nearly a quarter of companies across the country closed their doors during March and April despite assistance from programs like the Paycheck Protection Program. Two-thirds of the southern Nevada businesses that replied to an Applied Analysis survey report a decline in sales and revenue.
Nevada’s small businesses are an essential part of the state’s economic fabric. More than 480,000 people were employed by the state’s 270,000 small businesses last year. The Nevada Small Business Development Center has provided counseling for more than 1,600 small business owners trying to navigate CARES Act funding or reposition their business.
“Every one of those small businesses has a story to tell,” Males said.
Small business owners are now having to consider what they can do to better prepare for the environment that they’re going to have to operate in, he added.
“The second question is,” Males said, “is this feasible for us to think that we can operate with these additional expenses that are going to be necessary for the safety of our patrons.”
Nevada businesses received more than $3.1 billion from the Paycheck Protection Program stimulus package that was part of the CARES Act approved by Congress in late March. While stimulus funding does aid business owners in the short term, some companies that have received aid have still had to lay off employees.
Males said though there will be damage, some small businesses will succeed because of the opportunity extended through federal assistance. Some nationwide, Males said, ends up being quite a few.
“Another stimulus bill probably would be beneficial,” Males said. “It just gives us, buys us a little bit more time to get to this new normal. A lot of small businesses will succeed because of the opportunity to extend the date they can keep their employees around.”
Males encourages business owners who decide to continue operations to do their due diligence, stick to a budget, be frugal. Many businesses will close, and for those who can’t make the numbers work, Males said it may be time to start looking at something else.
“There are going to be a lot of opportunities for people to rethink their business,” Males said. “They can maybe replace their business with something that’s better, that’s marketed a little different, that targets somebody a little different or they try to solve a particular problem.”