There’s no doubt that the COVID-19 pandemic has disrupted virtually every aspect of life as we know it. Schools have shuttered, weddings have been postponed, and trips have been canceled (despite the fact that 96% of American workers say vacation time is important to them). But arguably, one of the biggest shifts has been in the U.S. labor force. As of now, roughly 44 million Americans have filed for unemployment benefits. And although many businesses are trying to make ends meet by working from home, offering online orders, and providing delivery or take-out services, it’s clear that some are succeeding far more than others. Let’s take a closer look at who’s struggling to get by and who seems to be doing better than ever in the wake of the pandemic.
Arguably, small businesses have taken a huge hit due to the coronavirus. Although 50% of small businesses survive for five years or longer, the unprecedented financial strain will likely cause a higher percentage to close their doors permanently in the near future.
One local survey of 700 San Diego businesses found that 60% of business owners needed financial support, with more than half of those businesses being forced to lay off employees. And although a 2006 report entitled “The Federal Response to Hurricane Katrina: Lessons Learned” outlined the shortcomings in our national preparedness system pertaining to disaster readiness and response, it’s clear that the federal government has been playing catch-up from the beginning. Many business owners have been unable to secure funding through the federal Paycheck Protection Program and other economic relief funds, leaving them with limited options amidst an overwhelmed system. That said, the Small Business Administration has now extended the forgiveness period for loans obtained, which may help small businesses stay afloat for now.
Minority-owned small businesses, in particular, have been having a tough time. One University of California study found that 40% of Black-owned businesses nationwide have already gone out of business since the pandemic started. Further, a study conducted by the Global Strategy Group found that only 12% of minority small business owners who applied for PPP loans received what they asked for, with 26% reporting they received only a fraction of what they requested.
Of course, restaurants, gyms, and retail locations have certainly had it hard since COVID-19 cases started to appear throughout the nation. Airlines, hotels, and other businesses that depend on travel and tourism have also experienced major upheavals. Movie theaters, sports arenas, ticketing companies, and businesses based on live entertainment have also taken a hit. And while many major corporations have the wherewithal to keep moving forward, there have been a number of surprising closures and bankruptcy filings from large brands like J.Crew, Neiman Marcus, and Gold’s Gym, with companies like Hertz and JC Penney weighing their options.
Although it might seem like everyone is struggling right now, there are some businesses that are making lemonade out of lemons. Ice cream trucks have managed to make a comeback, while many grocery stores have actually struggled to keep up with customer demand. Businesses based around outdoor recreation — such as fishing gear, backyard pools, swing sets, patio furniture, hot tubs, and kayaks — have proven popular, as they provide items people need to have fun at home or to engage in outside activities while social distancing. Drive-in movie theaters may also prove popular, now that they’re allowed in many places and the weather is more forgiving. Businesses that provide cleaning supplies and services have also fared well overall, with meal prep services, liquor stores, and online furniture companies also reporting successes. Surprising no one, entertainment streaming services and tech companies that offer tools relating to remote work have also seen major wins.
But even for the businesses that are thriving at the moment, those successes might be somewhat temporary. As states start to reopen and pandemic panic starts to die down, Americans may be spending a bit less time at home. That said, this will give an opportunity to businesses that have been down on their luck — and there’s always the possibility of a second wave, meaning that the businesses that do survive will need to adapt for whatever the future holds.