As grim as the number is, it also shouldn’t come as a shock that it’s reported 2020 saw about 100,000 small businesses shut down—for good, which obviously is very bad.
A survey by WalletHub of the states whose small businesses have the best prospects for recovery does not bring especially encouraging news for New York State—or for the state of New York small businesses.
In a ranking of “States with the Most Pandemic-Proof Small Businesses,” the Empire State ranks 41st, with 1 Best and 25 average,
Part of the reason for the dismal showing is that New York appears to have a high proportion of small businesses in high-risk industries, in which New York ranks 44th, with lots of restaurants, for instance.
Logically, the state’s rank also is not impressive in the number of small-business employees operating in high-risk industries, which increases their risk of unemployment. It ranks 33rd out of 51 in that category.
New York also has the country’s third worst small-business credit conditions.
“Other than the Great Recession [of 2008],” says Charles Gross of Mount Marty University, “I do not remember a more challenging time.”
As Richard Ryffel, of Olin Business School at Washington University in St. Louis, points out, “Certain sectors will recover more slowly…[such as] hospitality, travel, and entertainment.”
Among advice for small-business owners offered by Ryffel, Gross, and other business school experts cited by WalletHub are …
• Make sure you have taken advantage of all financial relief opportunities available under the American Rescue Plan Act of 2021.
• Closely examine your expenses to see where you can cut costs.
• Leverage all technology for e-commerce, virtual selling, remote work.
• Review your business model, talk to customers, review strategies for the future.
• Look for opportunities to innovate that can generate new revenue.
• Collaborate with other small businesses, even those you may have thought of as competitors.
• If you’ve lost customers, consider ways to redevelop your customer base. The degree to which certain businesses lost customers they can’t attract back depends to some extent on if or how they were able to engage them (such as online) during the pandemic.
• Jason Greenberg, of University of Pennsylvania’s Wharton School and NYU, says the pandemic “has created a generational shock” that will speed the demise of some businesses and give rise to some new ones, namely those adept at combining in-person with virtual transactions, known as the “hybrid” model. Those firms, he says, “will be better situated for the current and likely near-term market environment.”
• Referring specifically to restaurants, Michael E. Dobbs, of Eastern Illinois University, says, “Those restaurant owners savvy enough to create to-go menus, at-home menus, provide delivery options (through partners or existing staff), streamline inventories and reduce operating costs—those are the businesses that made it.” In contrast, he says, about all kinds of businesses, “Those who have always done business one way and are unwilling to change at all will most likely see their businesses fail.”
• “The focus should be on learning from this event to make sure that a business has a future response if a similar event were to occur again,” says Christopher M. Scalzo of SUNY Morrisville.
Bruce Apar is a writer, actor, consultant, and community volunteer. He can be reached at firstname.lastname@example.org; 914-275-6887.