COVID-19 outbreak leaves small businesses on edge

Small businesses in Oklahoma appear to have weathered the pandemic better than many other parts of the country. (Photo by Arturo Rey via Unsplash)

The further increase in COVID-19 cases nationwide raises concerns about the survival of small businesses.

As the omicron variant skyrockets infections and hospitalizations, President Joe Biden and a number of governors and mayors have pledged to avoid another shutdown.

In August, 57% of small businesses surveyed told that they plan to shut down permanently if they face further shutdowns; 62% of those business owners said they were “barely hanging on” after the financial devastation of the first shutdowns.

Oklahoma reported a record 6,280 new COVID-19 cases and an increase in hospitalizations on Thursday, but small businesses are doing well.

“There was an immediate hit (with the onset of the pandemic), there was an immediate struggle, but we reopened fairly quickly,” Kiley Raper, CEO of the Oklahoma Retail Merchants Association, said this week. “A lot of small businesses tell me it was the best Christmas in a long time.”

The policies of other states that crippled businesses and prevented them from reopening were not enacted in Oklahoma, she said.

“Our business owners are able to do what’s right for their business. The closures have been minimal, ”said Raper. “Things are really improving. Many of those retailers who have remained engaged with their customers through online and curbside service are doing as well as ever. “

The biggest problem for business owners is finding quality people to hire, she said.

The current labor shortage is also a challenge for restaurants, but supply chain issues and the cost of goods are even more of a problem, said Jim Hopper, president and CEO of Oklahoma Restaurant Association.

“Sales are up statewide, but that doesn’t mean their profits are up,” Hopper said. “The cost of goods has increased dramatically. “

If a case of chicken wings goes from $ 70 to $ 170, restaurants can’t raise their prices that much, he said.

“Each new variation creates new uncertainty and people cancel reservations,” Hopper said. Fixed costs like rent, utilities, insurance and payroll remain the same regardless of the number of seats occupied.

The rise in take-out sales is likely to be here to stay, he said, which means restaurants with items that don’t travel well have to change their menu or risk losing customers.

The United States is home to more than 6 million small businesses that collectively employ more than 61 million people, according to an October report from If 10% closed, more than 6 million people would lose their jobs.

The report shows that 715,603 people in Oklahoma are employed by small businesses, or 51.66% of the workforce. If 10% of these businesses closed, 71,560 people would be unemployed.

The US Small Business Administration announced in November that it had overseen the distribution of nearly $ 416.3 billion in emergency aid to more than 6 million affected small businesses, but many continue to face the uncertainty due to the pandemic.

Larry Weatherford, of the SBA district office, said that in Oklahoma, the Paycheck Protection Program provided 90,821 forgivable loans totaling $ 2.9 billion and 33,714 economic disaster loans totaling $ 2.77 billion in 2021.

A Federal Reserve report released in April estimated that the pandemic resulted in the permanent shutdown of 200,000 small U.S. businesses above historic normal levels in the outbreak’s first year, or about a quarter to a third of more.

The report shows that smaller businesses have closed at much higher rates than other size classes. These include full service restaurants, personal care services, auto repair, and some retailers.

A comparison in the report showed that more than 30% of sit-down restaurants in New York City may have closed permanently in the 12-month period after the start of the pandemic. Oklahoma’s number is considerably lower – less than 5% – and even appears to be lower than the national rate of closure in a typical year, the report notes.

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