It’s been a turbulent year during which the norms we’ve been accustomed to have been thoroughly turned upside down. The small business community has been no exception; suddenly businesses are being required to pivot, develop new business models and market to new customer bases.
This has been a crazy year for me personally as I’ve done my best to help my own clients weather the COVID-19 recession as best I can. I’m very proud and very pleased to say that most of the people I work with are doing relatively well; even so, now that I’ve seen spring and summer under these conditions I feel qualified enough making some predictions about where things are going to go as we head into autumn and winter.
The short version is that we’re in for a painful winter, but I’ve seen some truly amazing spirit from local businesses in my area – including many I work with! – that have allowed them to adapt and in some cases thrive in this strange new normal.
So without further adieu, five small business COVID-19 predictions for the next several months:
1. Let’s start with the obvious one: COVID-19 is going to see a resurgence in winter months and it’s going to be bad news for small businesses.
This is technically cheating since a resurgence of COVID-19 is already happening even during August when it was safer to hold socially distanced events and business outdoors. As of September 21 31 states have seen an increase in COVID-19 cases. As any doctor will tell you, during a pandemic when anywhere is unsafe nowhere is safe. We may be reluctant to actually shut businesses down again but peoples’ reluctance to patronize businesses or go out has already taken its toll.
There’s also no reason to suggest that there’s going to be a reversal of the escalating cases in the United States. Health experts are sounding the alarm about COVID-19 and it’s easy to see why. As More people in colder climates will move indoors and group together with less social distancing, and health experts in the article noted that colder and drier conditions exacerbate the transmission of flu-like illnesses.
The impact on an already battered small business community isn’t going to be pleasant. When people go out less they spend money less. They go to fewer restaurants, they shop in person less, they hire fewer contractors for things they can put off like housework, and they hire fewer people as they cancel events such as parties. That’s not to say that businesses haven’t already adjusted, but many of the techniques aren’t going to work in winter (more on that in a minute).
One client who actually is doing well has admitted that their primary concern is “limping” through 2020. That’s the general business atmosphere right now. Most small businesses have given up on any kind of significant institutional support or relief during COVID-19 and – far from any ideas of crushing it or breaking records – most of them are just interested in surviving.
2. Halloween participation is going to be significantly scaled down to the detriment of local establishments
The CDC is explicitly warning parents to not let kids go trick or treating this Halloween. I’m not a parent but I can imagine the fear factory easily. Letting your child visit dozens of houses and take candy from the same bowl as potentially hundreds of other children seems like a very bad idea. Some municipalities like Springfield, Massachusetts have already taken the step of banning trick or treating.
Similarly, I imagine far fewer people are going to to be enthused at the prospect of indoor haunted houses or crowded costume parties.
What’s so disappointing about this is that Halloween is normally a gold rush for local businesses. Takeout businesses tend to thrive between parties and parents who don’t feel like cooking, restaurants are often full, and party supplies often fly off the shelves. Another client made the interesting point to me recently that spas tend to do very well on Halloween as parents drop children off for sleepovers and give themselves a spa day. Beyond the candy industry Halloween is often far more profitable and lucrative for businesses than one might think.
How profitable everything will be this year as everyone adjusts to the new normal, but my prediction is a far less profitable year across the board.
3. There’s no sugarcoating this one: Winter is going to suck for small businesses.
Spring battered the small business economy but it wasn’t until late summer that people started realizing how bad the damage was, as many beloved local institutions started closed their doors after burning through cash reserves and not seeing any reason to stay open. With fewer people going outdoors in winter this stands to get a lot worse even with restrictions lifted. The economic recovery in late spring into summer has largely abated and there’s little sign of more institutional support.
Consider the case of the Cheers Replica bar in Boston, which closed down after twenty years in business:
“We just came to the conclusion, if we’re losing that much money in the summertime, what’s the winter going to look like?” said Markus Ripperger, president and chief executive of Hampshire House, the bar’s parent company.
Many businesses that failed in the early weeks of the pandemic were already struggling, had owners nearing retirement or were otherwise likely to shut down in the next couple of years. Those closing down now look different.
Cheers was a longstanding, successful business with access to capital and owners willing to invest to keep it going. But the bar, built to resemble the one on the 1980s sitcom, depended heavily on tourist traffic that collapsed during the pandemic.
This could informally be considered the “second wave” of business closures. The first wave was businesses that were already struggling or had owners with a foot halfway out the door – a few of my clients fell into both categories. The second wave is businesses – even very well established ones – that just can’t compete with the new COVID-19 atmosphere.
There’s also the lack of good weather. In summer we had outdoor dining, exercise classes held outside, and socially distanced catering events and retail markets. That’s not going to be practical in winter short of much warmer climates that had a rough summer due to blisteringly hot temperatures anyway. In addition to coping with what many analysts expect to be a rough winter, businesses are going to have to pivot for the second time this year.
This is also going to have a cascading effect that will prolong the recession we’re in. You may not mind the closure of a pizzeria in Pennsylvania, but as the article notes, small businesses employ 60 million people, generate tax revenue and are often the backbone of the local communities.
My prediction is that we’re going to see a lot more small business pain in winter that will cause shockwaves less visible than the one in March but no less heartbreaking. It ties back to that client’s comment I mentioned earlier about “limping” through 2020. In better years the plan might be to aim for the stars; this year I suspect most small businesses will be happy to stay on solid ground.
4. Travel is going to be way down. That might actually give local small businesses cause for optimism.
I’ve definitely been anticipating a lot of gloom this winter, but one bright spot to consider is the steep decline of travel. One thing I noticed over the summer is that the towns in my area were far busier than usual, and most of my clients reported busier than usual months of July and August in particular. Rather than jetting off to summer destinations or sending kids off to summer camp it seems that a lot of people stayed home and shopped local. This didn’t necessarily offset the catastrophic early months of COVID-19 when closures were mandated, but it provided some cushions.
This is a trend I expect to continue as more people decline to risk exposure to COVID-19. In some cases it’s not even an option; one family can’t visit their favorite ski resort in Montreal due to the US-Canadian border being shut to nonessential travel, nor can they travel to New York state because of the two-week quarantine procedures. The CDC has said that Thanksgiving gatherings or holiday get-togethers are dangerous, and it seems that many Americans are heeding the advice.
My prediction is going to be that more people will stay local and that small businesses in local areas not associated with tourism will benefit for it.
5. There’s going to be much more emphasis on shopping and buying local this holiday. That’s some more good news.
Another cause for optimism that I’ve seen this year is that people have been rallying around small businesses and committing much more actively to supporting them. I’ve seen fantastic groups on Instagram and Facebook dedicated to driving traffic to businesses affected by COVID-19. My local one has over 9,000 members!
Sometimes people can take their community and the small businesses in it for granted. That’s not something to be ashamed of, but if anything positive has come from COVID-19 it’s that people seem to be far more introspective and thoughtful about where they’re spending their money.
Granted, part of that may be that it’s much harder to order things on Amazon and Walmart, but something COVID-19 seems to be bringing out in people is a sense of community. Most people do seem to want to help or be there for others in anyway they can, and many have channeled this into small business advocacy, at least in my area. This will almost certainly adversely affect large companies, but hopefully some of that money instead goes to smaller merchants.
My prediction is that despite the gloom I’ve predicted, small businesses will be cushioned by more people making conscious decisions to shop local. It may be the reason some of them get through the year.
So those are my five predictions for this holiday season based on my years working with and now hosting small business website. I obvious would love to be wrong on the more pessimistic ones but I do see some hope spots as people take a more active role in rallying around their local businesses however possible. On a personal level most of my clients have weathered the pandemic relatively well and I’m hoping it’s a positive sign despite living in a relatively flattened curve area.
The next article might be a more detailed one about how to actually help your small businesses but the fact that you’re reading articles like this at all is a good sign. Just be sure to thank your local business owners for the work they do next time you visit!