Small Business Economic Outlook in 2021
To say that 2020 was a challenging year for businesses is an understatement. The world fought for survival with unemployment rates hitting an all-time low in various parts of the world. Many lost their jobs and a few others lost their lives (or their loved ones). With the arrival of 2021, it signals a new start but this does not mean that the battle for survival is over. The fight continues for small businesses to survive but how does the economic outlook look like?
The steps you take as a business leader during the first few moments of 2021 will be critical. The landscape is constantly shifting and your ability to adapt could spell the difference between small business growth and struggle.
Small Business Growth in 2021
While many businesses struggled in 2020, there are also businesses that seized opportunities that arose. One of the key trends for 2020 is that many shoppers and consumers have prioritized shopping small. There is a drive among local consumers to support local businesses and shops.
Going into 2021, this trend will continue, paving the way for more local businesses to flourish. Many consumers have seen their beloved local establishments get shut down due to the financial struggles caused by the pandemic. Hence, consumers will be rallying behind small businesses now more than ever. In this Salesforce report, consumers have shown their commitment to support local and small businesses over large corporations.
In order to facilitate growth in 2021, small business owners need to capitalize on this trend. It also showcases new opportunities to focus on local marketing and fostering a sense of community. That way, you will be able to get the support of the community that you are serving.
Challenges for Small Businesses in 2021
The first major challenge faced by small businesses would be the uncertainty of the times. While there are already vaccines being issued out in various parts of the world, getting access to them would remain a challenge. This means that it will still take some time before businesses and the society, in general, can experience a sense of normalcy and businesses can operate as usual. According to Raleigh Photographer Brian Mullins, “small single operator businesses in North Carolina struggled in 2020, but there’s hope that in 2021 we will turn the corner, especially with the vaccine now becoming widely available.”
Given the challenge above, the ability for businesses to adapt can prove crucial. Adaptability refers to dealing with unexpected changes. Be ready to roll for whatever the year brings. This is going to prove very challenging since mandates can change at a moment’s notice. You must set up a survival technique that is not just focused on a single approach.
In addition to the uncertainty of the business landscape in the US, cash flow management is going to be one of the biggest hurdles for small businesses in 2021. Proper management of cash flow will be very important because without cash, you have no business. A few other challenges that small businesses have to contend with include cybersecurity risks and the stiff level of competition. With everyone trying to survive, businesses of all sizes are trying to adapt and so those who are unable to keep up with competition could easily fall behind.
Help for Small Businesses in the US
It’s no secret that small businesses have been hit with the brunt of the Covid-19 impact. Since businesses are forced to close their operations or reduce their operating hours, it is difficult to generate enough income to maintain the operational costs. For this reason, the US government has issued several financial aid programs and grants for qualified small business owners.
Small business grants are essentially free money that is given to qualified business owners for a specific purpose. A grant is offered for businesses owners who are in the startup phase or those looking to expand. It can also be used towards daily operational costs to keep the business afloat. The good thing about small business grants is that they need not be repaid, unlike a loan.
The US Small Business Administration (SBA), for example, has offered many relief options for small businesses affected by the pandemic. An example of this is the Paycheck Protection Program through the CARES Act by the SBA. This program is established in support with the Department of the US Treasury. The aim of this program is to provide financial assistance to cover up to 8 weeks of payroll for small business employees (including benefits). Other types of financial assistance for small businesses include the Economic Injury Disaster Loans, SBA Debt Relief, and the SBA Express Bridge Loans.
There could also be different programs offered by every state government so it is best for small business owners to contact their local governments directly to inquire about grants and financial assistance.