Since the coronavirus pandemic first began in late 2019, it has drastically affected the global economy. Though even major corporations may end up struggling, entrepreneurs and small business owners have been some of the first to feel the effects of the outbreak. For many, the sudden changes from the coronavirus may end up destroying their business entirely. Here are a few of the many ways that COVID-19 is affecting entrepreneurs.
Reduction in the Number of Customers
Of course, the most basic way the coronavirus is harming entrepreneurs is by making it harder for them to find customers. Most people are staying home, so any small business that depends on customers visiting a physical location will struggle. Even those that are mostly an online presence may have some trouble because people are less likely to spend money on nonessentials when they are feeling worried and uncertain.
Government Policies That Shut Down Stores
In some cases, small businesses cannot keep operating even if they have willing customers and healthy staff. In roughly two-thirds of the nation, there are “stay at home” orders that may prevent businesses from running unless they are deemed an essential service. With many small businesses having very tight profit margins, not being able to operate can quickly run them out of business.
Continued Expenses Despite Lack of Income
The sudden lack of profit is made even worse when it is combined with the fact that most small businesses still have a lot of expenses. In addition to basic operating expenses like rent and utilities, the pandemic is also adding the cost of paid sick leave for many employees. Many small business owners report that they are dipping into personal savings to try and stay afloat. However, those without many backup funds are now in serious trouble.
A Lack of Networking and Funding Opportunities
For those just starting out, a major problem is the lack of networking opportunities. Events like SXSW, where a lot of startups first generate buzz and make connections with others in their industry, have been canceled due to restrictions on large gatherings. This makes it very challenging for entrepreneurs to even launch their businesses in the first place.