Survival Solutions for the Future
Small businesses are struggling now more than ever. The time for emergency solutions is over – it’s time for survival solutions. Mark Herbert, Vice President of Small Business Majority, discusses some of the priorities, programs, and resources that small businesses need to get through the winter and start rebuilding into next year.
The three phases of COVID-19
Emergency phase: Back in May, businesses were looking to the CARES Act and federal funding and anticipating another round of relief.
Pivot phase: With new capital infusion and other forms of support, businesses were scrambling to pivot in order to survive.
Survival phase: We are now at an inflection point – businesses have either shut down or are hanging on by their fingernails.
What businesses do over the next few weeks will determine whether they can survive into 2021. Programs like the federal Paycheck Protection Program (PPP) were created to address the emergency phase. Now, we need longer-term survival solutions.
State-level solutions
Small biz owners need more capital, plain and simple, but in many cases, the smallest businesses are the ones that struggle to access capital the most. The government must step in to de-risk capital for the riskiest businesses and make it more affordable. The state of California has taken swift action, including the programs below:
Small Business Loan Disaster Guarantee Program: This lending program was designed to help businesses that experience barriers to capital access.
California Rebuilding Fund: This public-private partnership launched recently to help California’s smallest businesses.
COVID Relief Grant: The Governor just last week announced a new $500 million grant program for small businesses. The program is still being designed and you can sign up for status updates here.
Advice for small businesses
Through the end of 2020, small businesses will be impacted by three major uncertainties: how the COVID Relief Grant will alter the small business capital marketplace, how the state will continue scaling the California Rebuilding Fund, and whether federal relief moves forward. The needs across the state are massive and so will be the consequences - California businesses received $66b in PPP loans and still need more support.
One great resource for making it through these next few weeks is to connect with a local resource center. The Small Business Development Center (SBDC) Network is incredible and free, and they can help you figure out your best options. To find the best free local resource, check out www.Venturize.org.
Look at how consumer behavior has changed during the pandemic and what this may forecast for the future. Already, e-commerce has increased by over 50 percent and the way people shop and collaborate has changed. Some of these trends may stick even beyond a vaccine if people continue to prefer this new approach to consumption. Ask yourself what new opportunities may arise that your business can meet and look to invest in those opportunities.
Small Business Majority’s 2021 priorities
Mark touched upon a few of his organization’s priorities as they look to 2021:
Access to capital. Business owners know that capital access is not a level playing field. Small Business Majority will be targeting policies that change the infrastructure for the smallest businesses. Rather than offering band-aid fixes, the state should build back in a way that unlocks as much capital as possible for longer-term strategic purposes like the California Rebuilding Fund.
Commercial leases. Eviction moratoriums will expire soon and businesses still owe money. Meanwhile, many business owners are in debt for back-rent. One of their biggest challenges will be in paying off their leases while simultaneously investing in ways to grow their businesses. While some landlords are willing to negotiate and trying their best to work with employers, a more comprehensive solution is needed from policymakers.
Ensuring that entrepreneurs can offer quality jobs, affordable healthcare, and access to retirement, among other things. A few resources that business owners can offer now include Covered CA for Small Businesses and the CalSavers Retirement Program.
To listen to the full episode, visit the Hack My Business podcast here. To reach Mark Herbert or get involved with Small Business Majority’s advocacy work for small businesses, visit www.smallbusinessmajority.org or email Mark at mherbert@smallbusinessmajority.org.
