The economic impact of Covid-19 on small businesses is unprecedented. Between February and April of 2020, 22% of small businesses disappeared. The number of active white business owners dropped to 17%. In comparison, the number of Black business owners dropped by 41% and Latinx business owners decreased by 32% (Fairlie 2020). This data highlights the disproportionate impacts the pandemic has inflicted on the Black and Brown Community Nationwide. As similar data continue to emerge at a local level, we at Kheprw ask the following questions:
What are the impacts of COVID-19 on Black and Brown business owners in Marion County? What are the long-term implications of these impacts, and what can we do to best support these businesses moving forward?
Receiving funding and financial support posed a significant challenge as revenues declined during the pandemic. Shifting to online/virtual platforms was also a challenge as a majority of operations shifted online. Consequently, the shift to more online marketing and networking was a significant adjustment for most business owners. We will explore each of the implications of these challenges below.
Challenges
The most consequential challenge revolved around funding and receiving financial support as revenues declined during the pandemic. Shifting to online/virtual platforms was another significant challenge, either due to lack of prior technological knowledge or accessing the tools and infrastructure needed to operate in a virtual space. Similar to technological challenges, the shift to more online marketing and networking was a significant adjustment for most business owners. We will explore each of these challenges along with some key takeaways below:
Funding
From our feedback, 73% of survey respondents reported a loss of revenue/decline in business. As a result, 84% were negatively impacted as a result of the pandemic. For those negatively impacted, 51% of survey respondents had to temporarily shut down operations while 53% indicated that it will require significant time and resources for their business to recover.
73% of businesses lost revenue and/or experienced a decline in business.
51% had to temporarily shutdown
53% of businesses will require significant time and resources to recover
State, local, and federal governments sent out financial aid as a response to the shutdown. This aid, in the form of PPP loans and SBA grants, was distributed nationwide. Yet a majority of business owners we reached out to, applying for and receiving financial support was a significant challenge. In the survey, over half of the survey respondents (60%) of business owners were denied financial assistance, while 25% did not seek out financial assistance of any kind. However, a quarter of respondents (25%) received support from local organizations while 16% received federal PPP loans.
Technology
As brick and mortars shut down and face-to-face interaction halted, a majority of businesses moved their operations online. All interviewees discussed the challenges related to their online adaptation. Covering the costs to obtain the necessary online tools and technology to adjust their business was a common obstacle. While many business owners had some prior knowledge or skill sets in utilizing online tools and technology, almost all noted the need for either additional training or to utilize online tools effectively.
Covering the costs to obtain the necessary online tools and technology to adjust their business was a common obstacle
The ways in which the clientele and customers are adjusted to technology created additional barriers for several businesses as well. Either clientele was unwilling to adapt or did not have the skills themselves to efficiently utilize technology. This resulted in either a shift or decline in clientele for several businesses. Additional barriers are loss of community and engagement among customers, other businesses. Almost every business owner noted optimism in technology and has embraced the use of online platforms as the new normal for their business. However, many feel that there are far more barriers to overcome in effectively engaging with customers and clients online.
Either clientele was unwilling to adapt or did not have the skills themselves to efficiently utilize technology.
Marketing
Acquiring the skills needed to adapt their products and market their services online posed a significant challenge to respondents. Many mentioned the need and desire to expand their web and social media presence, but are not adequately trained and/or have the capacity to grow these skill sets.
In addition to marketing, most respondents have noted that there does not seem to be a strong network among black business owners to connect and support each other. Notably, several have expressed the desire to engage with other black businesses online.
Needs
The first step toward addressing the challenges discussed above involves a greater understanding of business owner’s needs. The feedback we received highlights both temporary and long-standing needs. Therefore, support from organizations and governments should address the long-standing needs of the community in addition to providing temporary relief.
Temporary financial aid to support businesses during the pandemic is difficult to obtain for several small businesses. Survey data shows most businesses are less than five years old. In addition, a majority of these businesses employ less than ten people at a time. Correspondingly, many indicated a lack of the capital and capacity needed to apply for and receive aid. Yet without financial support in the short-term, small businesses are at a higher disadvantage to growing capital and expanding capacity in the future. Right now, governmental organizations and private funding groups must consider the capacity challenges and provide more accessible support and resource system to receive funding.
Survey data shows most businesses are less than five years old. In addition, a majority of these businesses employ less than ten people at a time. Correspondingly, many indicated a lack of capital and capacity needed to apply for and receive aid.
The need for capital and capacity is a long-standing issue for small businesses. Key needs identified from our interviews such as building up financial literacy and business strategy skills relate directly to this issue. Addressing these needs would allow business owners a greater ability to build the capital and capacity required to remain resilient in the face of many challenges ahead.
Local business support programs and training resources are available in Marion County but provide little help according to our interview feedback. A common critique from our interviews was that they did not provide much support beyond the basics of starting a business. While initially helpful, the programs were redundant while not providing any tangible business support. What is needed are programs that can provide business strategy solutions at varying levels. And if those programs are available, information and resources must be easier to locate and access online.
Opportunities
Tapping into the opportunities present within Marion County is a critical step in addressing the needs discussed above. In addition to the external opportunities present, examining opportunities emerging within the Black and Brown Community is a critical step to approaching ongoing challenges. In examining these opportunities, our first step was to identify commonly shared outlooks and motivations among business owners. The survey and interview data we collected highlighted some key themes: The feeling of resilience and ability to adapt to a changing world, the commitment towards strengthening community and building a network, and the increased awareness for Black Business support.
The pandemic not only created new challenges for business owners but exposed the long-standing economic and systemic inequalities faced by the Black and Brown community. The impact of Covid-19, in addition to the Death of George Floyd this past summer laid bare the persistent inequalities and systemic racism present in the United States. The Black Lives Matter protests and activism online resulted in increased support of Black Owned Businesses. Several business owners shared a reluctant optimism to this increased awareness. While some experienced an increase in business as a result, some expressed cynicism in the long-term intentionality behind the increased support. Additionally, business owners we interviewed were acutely aware that their difficulties or apprehension in receiving governmental financial support directly correlates to decades (if not centuries) of racist systemic and economic policies. These policies led to generational gaps in building up wealth, capital, and financial literacy. The awareness of these challenges is our opportunity to focus our ongoing data analysis coupled with continued conversations with Black and Brown Business stakeholders to create better systems of financial support and awareness.
As discussed above, enduring decades of systemic and economic impression creates disproportionate challenges for Black and Brown Business owners during the pandemic. Yet, the ability to remain resilient and to adapt is a key opportunity to explore and build upon. A common occurrence among the feedback was the ability for businesses to quickly adapt their business during the pandemic. This either included meeting the needs of a changing clientele, moving their operations online or switching up the services and products offered. And while a majority of businesses we reached out to were negatively impacted, they were able to pivot quickly and adjust to retain their business. Yet, a majority of business owners expressed the need for external support and resources for their business to recover. However, there is no returning to the way things were pre-pandemic nor is there an expectation among business owners. Most of the feedback expressed optimism in how the adjustments made will provide long-term benefits to their business. As a result, many have expressed interest in building up their skillsets and devising business strategies to support the new normal. Alongside expanding capacity and financial literacy, the most commonly desired strategies and skillsets include developing a better online presence through marketing, networking, and communication.
As we adjust to a new normal that includes an increased virtual presence and online interaction, there is a tremendous opportunity to establishing an online support platform for Marion County Black and Brown Businesses owners. Currently, there are few established networking and support spaces, online or virtual, dedicated to Black and Brown Businesses owners.
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