Three Pandemic-Related Business Trends And How Entrepreneurs Can Respond
By Lisa Song Sutton, Las Vegas based entrepreneur, real estate investor and former Miss Nevada. Find out more at www.LisaSongSutton.com.
I am passionate about encouraging people, particularly women, to take a seat at the table and make their voices heard. This is especially important for minority business owners, who, according to research by McKinsey, “employ more than 8.7 million people and are concentrated in the industries most immediately affected by the pandemic.” It is with that same spirit that, as a female entrepreneur, I wish to add my voice to the conversation about what small business owners like me can do when so much feels outside of their control.
Covid-19’s disproportionate effects on minority-owned businesses — which only compound disparities that existed prior to the pandemic — add to the urgency of shoring up the foundation of our country’s economy. Per a National Bureau of Economic Research study regarding Covid-19’s toll on small businesses, for instance, “African-American businesses were hit especially hard, experiencing a 41 percent drop. Latinx business owners fell by 32 percent, and Asian business owners dropped by 26 percent.” What’s more, “immigrant business owners experienced substantial losses of 36 percent,” while “female-owned businesses were also disproportionately hit by 25 percent.”
Here are three pandemic-related trends entrepreneurs across the nation are facing and how they can emerge from the pandemic’s economic wreckage.
1. Constantly Changing Regulations
The vaccine mandates took a wild ride: They were in effect, and then not in effect, and required for over 100 employees and then not… business owners have had to pivot multiple times over. Instituting the additional regulations requires more HR staffing and more squeeze on existing talent. Employers have had to weigh out whether to lay off staff who don’t want to be vaccinated while realizing that the new hiring pool is virtually nonexistent.
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State and county ordinances have changed their mask regulations multiple times — from fully required, to required only for the unvaccinated, to not required at all and then back to fully required. Business owners can barely keep up.
While it can be difficult to stay on top of ever-changing regulations, entrepreneurs can get through this by visiting city and county websites regularly and checking city and county social media accounts. Oftentimes, most municipalities have a Twitter account that’s used for the most up-to-date information.
2. The Great Resignation
Though job openings continue to shatter record highs, according to one survey (paywall), “two-thirds of [small] business owners reported having a ‘very difficult’ time finding the right employees to fill open roles, up from 59% in August and from 50% in July.” In another, nearly one-third of small business owners “say they have open roles they have not been able to fill for at least three months, up from 24% last quarter and 16% in Q1 2020.”
As a result, small businesses across America have resorted to “dramatically slashing their opening hours or cutting back on their services — both because they can’t find enough staff to operate as usual and because labor is getting more expensive. Nearly a quarter of small and medium-sized businesses said […] they’d reduced operating hours to cut payroll expenses.” Overall, most — 80% — “say difficulty hiring is affecting their bottom line.”
Employers have to get creative. At one of my companies, we offer flexible hours and the ability for staff to trade/switch shifts with other team members. As long as the shift is covered, we won’t be sticklers about who is working. We also have implemented competitive challenges to increase revenue, like who can open the most mailboxes in a month. Sometimes small business owners don’t have enough wiggle room to offer larger monetary benefits or higher compensation. Get creative in how you can offer more flexibility or other benefits that don’t necessarily cost you a specific dollar amount but can help keep your staff motivated.
3. Interrupted Supply Chain
As measured by the most recent U.S. Census Small Business Pulse Survey, “45% of businesses said they are having domestic supplier delays”—up from 26.7% during the first week of 2021. According to a recent article (paywall) in the Wall Street Journal, small business owners are acutely vulnerable to supply chain woes as we have “fewer resources to absorb or push back on price increases and less leverage to pass along the higher costs to customers.” Consequently, according to one survey, “half of small business owners reported that supply chain disruptions have a significant impact on their business, up from 32% two months ago.”
Entrepreneurs can hack supply chain issues by switching up where they source or even bringing some or all of their needs in-house. There’s been a huge shift in Nevada (where I live and work) of warehouse/industrial build tenants who used to be distributors, and now many of them have switched to manufacturing. There’s currently no end in sight for the supply chain crunch, so come up with innovative ways to bring many of your needs in-house.