Small business relief remains elusive to most. Promises continue, however the results thus far seem to be non-existent. This continues to demonstrate the growing disconnect between our elected officials and the common person. As we deal with the Coronavirus small businesses need help. The government loves to tout small business growth, protection, and it’s economic importance in all of their campaign rallies and stump speeches. Yet, it is becoming increasingly clear, that few, if any fully understand the competitive spaces in which entrepreneurs and small business owners operate. The margins are often razor thin, regulations cumbersome at best, if not downright unbearable, and cash flow is always a struggle.
Importance of Small Business to American Economy
Small business within the American economy is extremely important. In many ways the United States’ model of small firms, innovation, and ease of conception is what allows our country to continue as a major player on the global stage. While the major corporations throughout America are the brands that people know and recognize, small business still accounts for approximately 50% of our annual GDP. Let that sink in, fifty percent! Many of these businesses are unable to survive a complete stop to business operations, and even fewer still, can survive a prolonged stop as we are experiencing now. While it does appear that the government is interested in working quickly, they seem unable to cut through the tremendous red tape generated between agencies and regulations. To fight the growing expectation that the American economy is moving full steam towards a full-on recession we must take action NOW.
As we approach almost one month of total shutdown here in New Jersey, small business relief remains elusive. Availability of funds and a timeline of when business may resume is being pushed further and further out each day. Many firms have found relief somewhat indirectly as many vendors and partners are experiencing the same anxiety of uncertainty and recognition of revenue loss. The looming problem which persists is the economic impact of this scenario as a large mass of small businesses begin to fail. Unable to operate and unable to collect debts, this economic pandemic will likely be the longer standing problem. As the virus threat is mitigated and neutralized through best practices and scientific breakthroughs, the economy may not enjoy the same fate.
The foreshadowing of future events is equally nerve racking. Small business relief remains elusive, and stimulus, loans, and grants to assist with the Coronavirus Pandemic continue to stall. Lawmakers and the executive branch are now considering a jobs act. As discussed in a previous post, the idea of a jobs program seems counter intuitive to protecting small business in an otherwise hot economy. Unless projections tell you there is going to be a shortage of small business in the future. With this notion in mind, it does appear Washington may already realize the error of their delayed response and bureaucracy-ladened stimulus programs.
Difficult Times Ahead for Small Business
The road ahead for small businesses for at least the next 18 months is going to be bumpy and arduous. Many businesses are going to perish as we continue to contend with the uncertainty of the Coronavirus pandemic, with many more persevering only by the skin of their teeth. The optimistic side of this challenging course is the strongest, most well prepared firms will be best positioned to find success again as the economy reopens.