As the holidays approach and the coronavirus pandemic continues to rage, it is more important than ever to support small businesses. Many small businesses have had to close in-person services and have lost money to the convenience of bigger corporations like Amazon. Only about 47% of small businesses expect to be open through the duration of December. This has been especially difficult on minority-owned small businesses, as they are 5% more likely not to receive bank loans and 7% more likely to expect pandemic-related loss of profit than other businesses. To help these businesses and boost your local economy, doing your holiday shopping locally is key.
Right now, the future for small businesses is uncertain. Many have had to lay-off a majority of their employees, feeding the current job loss. The unemployment rate in the U.S. is at 6.7% according to the Bureau of Labor Statistics report from December 4th. Usually, small businesses provide jobs for 47.3% of the private American workforce. Without these businesses able to hire as many people, not only is it hurting unemployment rates but it is also hurting the economy. Workers purchase things in their community, which helps boost the economy in that area. Small businesses also provide tax money and development for their communities. Supporting larger corporations, which have all continued to boom during the pandemic, pushes money out of the community and takes customers away from small businesses who need more support.
Small businesses owned by people of color and women have been hit the hardest since the pandemic broke out. A report from the House committee showed that the Paycheck Protection Program (PPP), which ended in early August, rejected many minority and women owned businesses because they were not prioritized by banks. In 2019 in the U.S. alone, 1.1 million small businesses were owned by women and another 1.1 million were owned by people of color, so this is impacting a large portion of small businesses and hurting the country’s economy. In fact, since 1988, businesses owned by women have been the fastest growing segment of the U.S. economy and October of 2020 marked the 22nd anniversary of the Women’s Business Ownership Act. Losses caused by the coronavirus pandemic have the potential to ruin this progress and minority ownership of small businesses, and in turn harm the economy. The Federal Reserve Bank of Cleveland wrote a report that states, “A combination of several factors may offer an explanation for why the Covid-19 pandemic has impacted minority-owned firms with greater severity than non minority-owned firms and could continue to do so as concerns around the virus persist… While 2019 Small Business Credit Survey data show minority-owned firms may have been less prepared to weather an economic downturn prior to the pandemic, the concentration of minority-owned firms in industries most impacted by shutdowns and complications surrounding the PPP rollout likely exacerbated issues for those businesses.”
There are plenty of things people can be doing to help these businesses. Finding small businesses in your area is as simple as an internet search. Websites like locally.com provide resources to help connect people with businesses near them. Many businesses have also gone online, even if they were not before. In some cases, this even means you can now order their products from their websites. If you can’t order online, properly wearing a face mask and going to these shops is one of the best ways to support them. Posting pictures or reviews of your purchases on social media gives them appreciated free advertising as well. Many small businesses have sales to draw in consumers, so this may even save you money. Small businesses are also advocating for the purchase of gift cards to these stores (which could make good presents for loved ones) as a way to help support them. If you can afford it, extra tips are helpful too. When it comes to food, a lot of locally owned restaurants and coffee shops have implemented contactless takeout options.
Small businesses are often under appreciated, but right now that needs to change. This holiday season, make sure to support your local small businesses!