Small businesses are especially vulnerable in times of crisis, said Marta Gomez Frey, director of the Collin Small Business Development Council. Without sufficient cash flow or savings, many companies are faced with the reality of having to close their doors for good, she said.
The strain on small businesses brought on by the coronavirus is threefold, Frey said. Many establishments are not only struggling to get customers through the door but are also grappling with a skeleton workforce and inventory shortages.
“The overall mood among business owners is sadness, desperation and frustration,” Frey said.
There are thousands of small businesses in the Dallas-Fort Worth area. In 2019, the U.S. Small Business Administration reported a collective 256,060 companies with 250 employees or less across Collin, Dallas, Tarrant and Denton counties. This represented a roughly 9% increase year-over-year.
Also weighing heavily on the minds of business owners is the uncertainty around federal disaster assistance loans, which so far have not been made available to companies in North Texas, Frey said.
“There’s a lot of frustration with the government machine,” she said.
Gov. Greg Abbott declared a state of emergency on March 13, effectively rendering Texas counties eligible for disaster loans through the SBA. However, there are many things that have to happen at the county and federal level before businesses can apply for the loans, Frey said.
Despite the holdup, it is all but guaranteed that businesses will soon be able to apply for these loans, so owners should start gathering the necessary paperwork, Frey said. More information on that can be found here.
“If it is one of your goals to try and access this money, get this information put together as quickly as possible,” she said.
There are also several ways that businesses can save on costs without having to layoff employees, Frey said. Options include asking for deferment on a loan; discussing looser terms with suppliers and vendors; minimizing frequency of supply orders; negotiating rent; consolidating bank accounts; or reviewing insurance policies to ensure businesses are not duplicating coverage.
“Businesses still have to keep moving forward, especially to plan for recovery, but reducing costs in these ways now may help,” she said.
Companies should also consider strategic partnerships, Frey said. Restaurants, for example, could team up on wholesale orders to save on pricing. Other solutions involve pairing up with other businesses to cross-market each others’ services, she said.
Even as gathering bans and business limitations are lifted, it’s going to take time for companies to make up for the loss in sales, to regain employees or to restock supplies, Frey said. For some it could take months or even years to regain their footing.
“It’s going to take a while for all those pieces to get back in order to be whole again,” she said.
Survival of small businesses will ultimately depend on the ability to serve customers, Frey said. The public should be thinking of innovative ways to safely support local businesses during this time, she said.
“Order delivery, order pickup. Buy gift cards for birthdays coming up,” she said. “It really does help a small business owner—every little bit counts.”