By Tom McHale, Incoming President, Pursuit
Small businesses have adapted for us. This holiday shopping season, we must adapt for them.
If I could recommend developing one skill to survive a pandemic, it would be the ability to adapt to a changing environment. The ability to turn on a dime to tackle new problems as they emerge has been critical to helping doctors treat patients, families navigate remote learning, and individuals handle the emotional roller coaster that COVID-19 has created.
No group has proven to be more skilled at adaptability than our local small businesses. Since day one, they have navigated uncertainty, changing regulations, and evolving consumer preferences to stay afloat. They have pivoted in a thousand different ways to support us as consumers as well as their communities. This holiday shopping season, it is absolutely crucial that we adapt our consumer habits to support them.
Early in the pandemic, we rallied to support our local small businesses. Our social media feeds were full of calls to action to purchase gift cards, shop curbside, and order in. Larger, more fortunate businesses challenged their customers to shop small. We bolstered our small businesses and doing so gave us the ability to make a small difference in the face of a very, very big problem.
Eventually, our enthusiasm for shopping locally eventually waned, attributed in part to the necessary tightening of our financial belts. However, “COVID fatigue” applies to more than just public health guidelines. We grew tired here, too, and the convenience of online shopping with larger retailers became far too appealing.
Over the next few weeks, it is critical that we ratchet our support for small businesses back up to early pandemic levels, and then some. When holiday revenue can account for 20 percent or more of a retail small business’s annual earnings, a poor holiday season will be the final nail in the coffin for many local establishments.
At Pursuit, a mission-focused small business lending organization, we have a ground level view of the pandemic’s impact on the entrepreneurs we serve—and you will not be surprised to hear that it isn’t pretty. Small business revenue has plummeted, and we have heard from hundreds of businesses that are having difficulty paying their bills and employees.
Most of us have seen how the pandemic has impacted businesses with our own eyes. By this point, you are almost certain to have a favorite business that is closed or is struggling to survive, or have noticed the red “permanently closed” headlines as you’ve searched for places to eat or shop on Yelp and Google.
We work individually with our borrowers, a significant percentage of which are women and people of color. Algorithms do not analyze their financials or make loan decisions—we do. And what we see, even in the best of economic times, are businesses working with razor thin margins and high levels of debt. Businesses that are making it but could easily falter at even the smallest set back or downturn.
And as these businesses start to fail, so do our communities. The domino effect is at play here: a local comedy club closes and the restaurant next door soon follows. Two retail shops around the block hold on for a few more months and then hang their frenzied “Store Closing! Everything Must Go!” signs. The owner contemplates the irony in these signs drawing back the foot traffic that would have helped her avoid this moment in the first place.
If 50 percent of small businesses fail by their fifth year in good economic times, what will that statistic look like during the worst economic period in our country since the great depression?
By June of this year more than 22 percent of all small businesses had closed their doors. And now, Paycheck Protection Program loans and other federal, state, and local relief dollars are gone or at best running thin. We are facing a critical time—not only from the public health perspective, but from the economic one as well.
Trust me when I say that we choose to spend over the next month will have a lasting impact on our communities for years. Refilling downtowns and commercial corridors with meaningful, local businesses that provide steady jobs will be a lengthy process.
Small business owners know this and are working around the clock, pouring all their energy and time into to ramping up new business plans, delivery channels, and products to meet us as consumers at our new normal. Among our own borrowers, we know those who have launched new e-commerce platforms virtually overnight, completely retrofitted their establishments to meet COVID safety guidelines, and created programs to deliver products to where their customers are—at home.
At the same time, these businesses have continued to invest in their communities. They have donated meals to frontline workers, worked with community leaders to problem solve, and put the health and safety of their employees first.
Community business owners are holding up their end of the bargain and it is imperative we hold up ours. When the Amazons and big box stores of the world tempt with access to tens of millions of items and fast delivery, ensuring that your holiday shopping dollars are channeled to small businesses takes a conscious and dedicated effort.
To ramp up your support this holiday season, put local items on your own wish list. Visit the websites of retail stores in your town. Call and ask about a store’s COVID protocols, and if you think you can shop safely, get out and visit the stores in person (you will likely find that most local businesses are going above and beyond to keep their customers safe). If you find an item on Amazon, see if you can track down the third-party seller’s website and buy it there.
Small businesses are often the canary in the coal mine when it comes to economic distress. Weeks before COVID’s patient zero in the Northeast, we were warned of the coming economic danger by a swath of calls from distressed business owners. Their key customers had already cancelled orders, diners stopped eating in, and foot traffic had begun to dwindle. Small businesses are also early indicators and critical players in economic growth and resilience—their survival puts us years ahead on the path to recovery.
Most small businesses went into March and April thinking they would be required to take a two- or three-week hiatus before resuming full operations, but there is no end in sight. These businesses are so crucial to our economic recovery, but how long can they be expected to keep the ball in the air if we do not back them up with our full support?
Together, we can help shape what small business in our communities looks like now, and for the future. Let’s make public action in shopping small peak again this holiday season, and stay strong through the “end” of the pandemic.