Strategies for Small Businesses to survive and thrive

Vidya Sethuraman
India Post News Service

Small, locally-owned businesses are among the entities hardest hit by the COVID-19 pandemic and subsequent closures. Most organizations worldwide are small in size, and the importance of small businesses to the global economy is indisputable.  EMS’s May 29 briefing brought together experts to discuss strategies for recovery and even long-term growth. 

Dr. Tung Nguyen, UCSF gave the update on the pandemic. As of May 28, there are over 5.6 million people diagnosed with Covid 19 Worldwide. In the US, there are over 1.8 million reported cases and deaths 105,557. In 3 months, COVID 19 has killed more Americans than any Wars (exception being WWI, WWII and Civil war). In a study by UCSF, 53% of the positive cases did not show any symptoms. Thousands of infections are not documented yet and the low wage workers who don’t have the option to work from home are at greater risk.

There is no new development in the vaccine for COVID 19.  There are at least 90 groups worldwide working to develop COVID-19 vaccines. Roughly 20 of them are working on DNA- or RNA-based vaccines, about 25 groups are working on viral-vector vaccines, and numerous groups are working on protein-based vaccines. States which have partly lifted the SIP have seen a spike in the infected rate. With a better understanding of infection rates, officials can make more informed, prudent decisions about when the outbreak has slowed enough to warrant reopening.

Charles Phillips, a Class A director of New York’s Federal Reserve Bank, 
prominent philanthropist and businessman spoke on the factors historically which have left minorities access to the funding. The PPP is one of the core programs set up by the federal government to keep the economy stable during the coronavirus pandemic.

It offers loans to small businesses, which are forgiven if they are used to pay workers’ wages and some other allowed expenses. The FED has 9 different programs for both small and big companies. Initially when PPP was introduced on April 3, we had issues such as unclear guidance, technology challenges with etrans – Amazon, Finastra; most of the small businesses didn’t have the traditional documentation – financials and tax returns, filled out incorrectly, language issues. 

The larger banks got most of the money during its first phase, because they had better equipped systems in place. Some of the small businesses had high hopes for the Paycheck Protection Program, which offers businesses forgivable loans to cover payroll for eight weeks after the loan is signed, as well as rent, interest on mortgages and utilities. At least 75% of the money must go to payroll in order; the rest must be used for other business-related purposes in order to get loan forgiveness.

The second round of the payout is going good and small businesses are getting the money.  The Small Business Administration approved $511 billion in PPP loans to 4.4 million borrowers as of May 23. Loan fulfillment rate increased from 38% in the first week to nearly 67% in the third week. First round of PPP funding, average loan size was at $206,000. As of May 26, it had declined to $115,000 indicating that small businesses are getting benefitted, said Phillips.

Ted Lieu, Congressman, 33rd District in Los Angeles said that Congress has authorized roughly $3 trillion in coronavirus relief in four separate measures over the last two months. These bills attempt to protect the American economy from long-term harm caused by stay-at-home orders and respond to the overall impact of the virus. He thinks these four bills are not sufficient to get out of the pandemic and the proposed HEROES Act would provide a second round of stimulus checks, and may potentially stop some layoffs. Covid 19 testing, tracing and isolation are the key to open the economy safely, said Lieu.

Sumita Batra, CEO of Ziba Beauty spoke on the hardship faced by her business that is over 30 years old. She spoke on the importance of having a special stimulus for the touch services industry, which is the most hit. 

Shelly Kapoor Collins is a venture capitalist who works at the intersection of technology, innovation and policy, with a focus on investing in female led and founded Technology startups in Cybersecurity, Fintech, Ed Tech and Digital Health. When the crisis hit, her team approached the Women led businesses and have been helping them.

Shelly emphasizes on investing in Women led businesses. Often, data shows it’s a smart business opportunity that produces great investor returns. In fact, companies with female founders performed 66% better than those with all male founders. Investing in women is smart for our economy, for our country.

A small business’s ability to survive the pandemic, and thrive in the future, will depend on their business models to discover and meet evolving consumer needs.