Small businesses are struggling in the pandemic: why?

March 10, 2021 12:42 PM

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A street lined with local storefronts. Photo courtesy of Mariah Solomon on Unsplash.

A street lined with local storefronts. Photo courtesy of Mariah Solomon on Unsplash.

Nowadays with people leaving their house less often, and most people ordering groceries and goods online, small businesses are struggling to remain open since they mostly rely on people going into their stores or restaurants. With the pandemic still going on, that is not possible. However, larger corporations have a way around this. They have the ability to let people enjoy their services from their home through delivery services. For example, Dominos, which has had a delivery option for a while, is doing well. But where does this leave small businesses? Usually, they are left to go bankrupt and this opens the door for more chains to take over a location where a local business once stood. This leads to less diversity of foods and goods in an area.

Today, with COVID-19 still trapping many people in their homes, it is hard for small businesses to stay afloat. Larger corporations have a strong fiscal foundation and can lean on, and spend, a lot of money on advertising their delivery services. They know that they can push through and still be thriving in the end. For smaller businesses, it is different — particularly ones that can’t bring their service to people’s homes like a corner store or a hardware store. Even before the pandemic, it was already difficult to be a small business owner. Close to 30% of all small businesses fail in their second year, according to LendingTree. With this pandemic, the challenge is a lot worse. Small business owner, Phil Wilcox, says that although many business owners he knows have been doing well, many people and businesses have suffered.

The effects of all of this aren’t just felt by the company owners and their customers. The employees of these establishments are being let go because they can’t be paid. This is why the unemployment rate skyrocketed at the beginning of the pandemic. Many people, specifically young people, have had a hard time finding and maintaining a job. This is a massive problem. Without a job, people cannot afford to survive. This hurts the economy and makes it harder for people to make a living.

People want safe consumer options during the pandemic. They don’t want to leave their house, risking being infected and possibly dying. They’d rather have essentials delivered to their houses, removing some of the risks. This is great for large companies. For example, when people need groceries, they won’t go to a local business for it. They will go to an online service that will collect items from Stop & Shop or Whole Foods and deliver them right to their front door. Although larger companies always had an advantage over smaller businesses, “the pandemic accelerates that advantage because people don’t want to go out of their house,” says Galen Moore, director of data and indexes at Coindesk. 

What can we do about this problem? How do we stop these businesses from going bankrupt? As people, we should make an effort to shop/order from as many small businesses as we can. Make an effort to not get everyday items from large corporations and instead from local establishments. If many people do this like many currently are, we can help businesses make it through.“The reason we have survived for ten years is because people go out of their way to shop at a small business,” said Wilcox.

Overall, this pandemic has led to the downfall of many small businesses, many of which are ones people used to use every day. Small businesses are important, though. They are vital to have the diversity of items in an area. “Imagine how lame your main street would be if your hardware store closed,” said Moore. This is why we should help stop the decline of small businesses. Make sure to support local businesses by choosing them over large corporations. They need your money a lot more than big corporations that have millions of customers.

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