01 Apr What SMB’s Need After Corona Virus
SOURCE: Online survey of 91 SMB owners/managers with 10-150 employees followed by telephone/web in-depth interviews with 6 survey respondents. Data collection period was February 13-15, 2020 for surveys and March 5-11, 2020 for in-depth interviews.
For many SMBs, their greatest challenge is hiring and retaining quality employees.
For those that had to immediately close their business and lay off employees, they will be faced with this task when they open up again.
Hiring and retaining quality employees can be a significant challenge for SMBs. In fact, over one-third (36%) of small businesses with 10-25 employees claim that hiring and retention is one of their top 3 greatest business challenges. Due to the COVID-19 pandemic, many SMBs have recently been forced to lay off employees, particularly in retail and restaurant industries. Larger companies, such as Starbucks and Uber, have generously given their employees up to 30 days of wages to help during this period, while the SMBs haven’t had that advantage. With these employees being hourly, many may have found alternate positions in those industries that are currently booming, namely the larger chain grocery stores. When social distancing measures are lifted, competition for the best employees will be fierce, and SMBs will have to move quickly to capture the workers they desire.
Relief is available though, provided by the CARES Act recently passed. Ironically, this bill does require quick action and navigating through paperwork and applications, and SMB owners rate themselves only a 3.89 on a 5-point scale for being confident with their ability to handle legal business matters, which was the lowest confidence for a variety of talent required to run a SMB.
One of the aspects they appreciate about having a small business is enjoying having close relationships with each employee – they’re not just numbers on payroll. So these closings/lay-offs are more personal for them.
Most SMB owners/managers will tell you one of the greatest joys or rewards in small businesses is the ability really get to know each and every one of their employees on a personal level, which leads to strong, important relationships.
How they talk about these relationships:
“I know who my employees are, a little bit about who they are, what their motivations are, and what’s happening in their life… There’s a lot more connection – I don’t sit in an isolated office as a cog in a giant machine.” (small town manager)
“You can treat your employees like family. One of my favorite parts is that it’s not some huge corporation where people get lost. We know the day-to-days of everyone’s life. If someone’s mom or child is sick, we can always make sure like that can be the priority. We’re a team here, we’re a family here. If you’ve got some stuff going on on the side, we have your back. I have loved that part.” (realtor)
“You get to know people – you get to see them on a daily basis and get to interact on a closer basis on projects. You get to work close with people and get to know them well and it’s more rewarding to work in this type of setting.” (educational institute finance manager)
The COVID-19 pandemic may bring additional stress, concern, and anxiety for SMB owners as they worry about multiple aspects of their employees’ welfare – physical health, mental health, and financial status, and their ability to help is limited. All this while trying to keep their SMB afloat and keep their own family safe and healthy.
Many small businesses struggle with the seasonality of their business.
One gold/diamond shop owner told me there are days when not even one customer walks through his doors. CV closures are this on steroids, especially if they were about to head into busy season.
SMBs tend to feel the impact of seasonal sales harder than their larger counterparts because they are less diversified in their offerings.
“There are certain times of the year where we’re very busy … and other times we’re very slow. We’re not exactly seasonal, but there are certain times when we are very busy and certain times when we can go a couple of weeks and see almost nobody in the door.” (retail jeweler)
For this store owner, imagine if those couple of weeks turned into a couple of months!
For those businesses that were finishing up their slow season and anticipating their busy season in March through May, COVID-19 may be particularly financially devastating. Graduation party vendors, restaurants with outdoor seating, professional organizers/cleaning services are just a few business types that will be hit hard. In a typical year, they can plan for the downtime by budgeting, but when their busy season is unexpectedly and suddenly shut down, it may a fatal blow.
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