Impact of COVID-19 on Small Businesses – Where Is It Worst?

This post is based on an article in Small Business Trends 20MAY20.

"In late March, the SMB (Small and Medium Business) Group surveyed more than 500 businesses. The SMB survey found out which small businesses were most impacted and outlined expected changes that will be part of economic recovery.

Which Small Businesses Are Most Impacted?
The COVID-19 impact varies by type of business, with these three categories most affected: personal service, hospitality and retail. The smaller the company, the harder the hit, with companies with fewer than 20 employees most affected.

Why? Because a small business with fewer than 20 employees typically lacks cash flow and capital. Those companies were the first to reduce hours for employees or lay off employees. Those businesses were also the first to stop hiring subcontractors." Small Business Trends

Like this article is a surprise. It is story about cash flow, cash on hand, and available credit. Small business are fragile because the owner(s) are focused on the immediate - sales and they don't have the time or the mental bandwidth to build the financial infrastructure until it is impossible. This is a problem the business owner needs to solve and a topic we cover in our E Track - Owner As Executive.

But blaming them masks the elephant in the room. You have people receiving government checks that arrive on time making decisions about who is essential and by definition which types of business are condemned to death.  If there was any empathy exhibited by these elected mandarins I would cut them some slack, but they treat the people who are the economy like indentured servants.

In case they haven't done the homework, over 50% of all the jobs on the planet are created by businesses under 500 employees and in the United States over 90% of new jobs are created by business with fewer than 20 employees.

Is this stupidity or on purpose?
eman