Why Small Businesses Are Suffering Hardest in 2020

There is no doubt that the effects of the horrific start to 2020 have been hitting everyone pretty hard financially. Many people have been left unemployed which has made taking care of general costs like housing and food pretty difficult, especially due to the country’s poor welfare payment system. Because of the personal economic struggles that people are facing, they are less inclined to purchase unnecessary items and so many businesses are starting to feel the toll. Though all businesses are feeling the strain of the economic crisis that the country is currently facing, nobody is suffering more than smaller businesses, and here is why.

 

Government funding

The government has not completely ignored the struggles that businesses have started to face and so have begun to offer grants to businesses to ensure their survival during these difficult times. This may sound like a useful gesture, however, they haven’t been very thoughtful when giving out these grants. They have ironically given these grants to bigger businesses, such as Mcdonalds, that don’t even really need the support right now due to their ability to still offer their services to the public. Smaller businesses already don’t have the influx of cash that a lot of bigger businesses have, so without that government financial aid, they are basically just surviving out of their slowly dwindling savings.

 

No contact procedure

You also have to take into account that a lot of small businesses aren’t just retail businesses, but are businesses that offer a service. However, due to the current social distancing measures that are in place, lots of small businesses that offer a physical service are not able to operate. A good example of a business like this is a hairdresser that needs to make physical contact in order to complete the service.

 

There are also a large number of small businesses that require entry into the home in order to operate. So for example, pest control businesses such as yalepest depend on completing home surveys in order to complete their jobs. However, rules that exclude people from entering households make this a difficult task. Because of this, lots of businesses such as pest control, plumbers and decorators are really taking a hit and are even ending operations indefinitely.

 

Niche Businesses

Most of the businesses that we would consider to be ‘small businesses’ are usually labeled as so due to their niche appeal. These businesses already trade with a smaller amount of people due to their lack of necessity. An example of a business like this would be something a little odder like ‘Organic Home Fragrances’ or other businesses along those lines. Businesses like this are really being hit as their already quite small client list is being damaged by the economic issues that people are facing.

 

However, there has been more social outreach to save businesses that are a little quirkier, in order to maintain the character that they bring to certain communities.

 

Lack of postage opportunities

A lot of bigger businesses have simply decided to move a lot of their product sales online in order to keep their business afloat. This is an excellent idea for those that are able to do this but have however become a major issue for smaller businesses that can’t do so. Because people are trying to avoid leaving the house unnecessarily for safety purposes, the use of online shopping has only increased. Because of this, businesses that don’t operate online are being forgotten about. These businesses are usually the smaller local shops that simply don’t have the finances or resources to do so. These businesses are really struggling and so it may be worth considering giving them a little more support.

 

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