The COVID-19 pandemic has caused an economic recession, and job and wage growth are slowing. Here’s how to manage as a small business.
Key takeaways
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The current job landscape is still unstable
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Remote work is becoming the new norm
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Government relief is keeping many small businesses from closing
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Staying flexible and adopting new technologies is key
The pandemic has caused record numbers of layoffs, unemployment claims, and business closures since it began in early 2020. The numbers are getting better in 2021, but there is still a long way to go.
The unemployment rate fell to 6.3% inJanuary January 2021, with over 10 million people still unemployed. Even though the rate went down, it is still significantly higher than numbers before the pandemic, which was 3.5% and 5.7 million Americans, respectively, in February 2020. Around 14.8 million people reported they were out of work because their employer either closed the business or lost business.
April 2020 saw the highest unemployment rate, as well as temporary layoffs of 18 million. The effects from those highs are still being felt, especially for small businesses across the country. It is estimated that one in six small businesses has closed since the beginning of the pandemic.
It’s more challenging than ever for jobs to bounce back and increase wages to account for rising costs of living. What does this mean for small businesses? What can you do as a small business to navigate this current job landscape that is far from recovered?
Businesses should start embracing remote work
The Bureau of Labor Statistics (BLS) found that in January 2021, 23.2% of employed Americans were still teleworking. This is down from the 97% of North Americans who said they worked from home at some point during the pandemic, but it is still a significant number that is likely to stay after the pandemic is over.
There are still 4.7 million people who were prevented from looking for work because of the pandemic. So offering more remote positions may mean that you can attract candidates who cannot find in-person work.
There is still clearly a need for remote work as many cities across the country have still not lifted restrictions on gatherings or in-person contact.
Some industries cannot offer remote work. But if your small business has any need for work that can be done remotely, it can be a great way to get work off your plate while hiring someone in need of a job.
Take advantage of government relief
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) introduced many relief initiatives for small businesses. The Payment Protection Program (PPP) provides loans to businesses to help them retain employees, and the loans can be forgiven if all requirements are met, including using the majority of funds for payroll expenses. The most recent relief bill from December 2020 reinstated the program for eligible recipients in 2021.
Other forms of pandemic relief for small businesses include the COVID-19 Economic Injury Disaster Loans (EIDLs) and debt relief options from the Small Business Administration, among others.
Taking advantage of these relief programs can help you keep your employees, which helps your business stay afloat and contributes to a slowly recovering economy.
Stay flexible and get creative
If the pandemic has taught us one thing, it’s that anything can change in an instant. This means that now and moving forward, small businesses have to keep a flexible mindset. Traditional benchmarks for business success have been uprooted, for example, and goals for the future may look completely different.
It’s also important for businesses to get more creative than ever to stay afloat. One report showed that 43% of small businesses have had to rethink how they do business since the pandemic began, and 32% have found new ways to deliver their services. Sometimes this means requiring employees to learn new skills or create a new service offering all together to survive.
Changes to procedures may be centered around safety measures. For example, perhaps a retail store has started to offer contactless delivery, or a business has created an online platform to accept purchases. If operating in person, businesses may need to implement social distancing measures and install barriers between workers.
Adopting new technologies
New technologies can help your small business stay open and help you keep or hire workers. Workflows may need to be moved completely online using cloud computing solutions. New web-based software can help businesses make the transition to a digital-only workplace.
Businesses may need to consider how to support workers who are now remote with new devices and processes for getting help with their Wi-Fi or home technology.
These kinds of pivots and innovations are all but required so that your small business can continue operating.
Providing new ways to support customers
No matter the industry your small business operates in, it’s more important now than ever to support your customers and put their needs first. As people are still struggling through the pandemic, they are looking for organizations to help them solve problems.
Encourage employees to focus on what you can offer customers and how you can meet their needs in this uncertain moment. Customer service should be at the forefront of planning. And reliability is also a key factor in maintaining customer trust right now and thus keeping your following strong.
Work with a financial professional
Another step to take is to talk to a financial professional who can help you plan through these challenging times. Franco Blueprint is here for you as you make these transitions to deal with the changes from the pandemic.
Your small business needs the right plan in place for accounting, and with all the recent changes to the work environment, this may mean establishing a new accounting system via the right software. We’ll help you implement a new system. We also provide services such as business formation, compliance, budgeting, and general accounting guidance.
Contact Franco Blueprint to get started with a free consultation.