Asian American Small Businesses Adapt in the Midst of Pandemic
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According to the U.S. SBA 2019 Small Business Profile, 30.7 million small businesses in the United States make up 99.9% of all businesses in our country. They are the backbone of our economy and employ nearly half of the United State labor market. However, the COVID-19 pandemic has left extensive damages to millions of these companies with over 100,000 businesses closed permanently and 7.5 million more are at risk of doing so. Our economy has been crippled and this seemingly sudden disaster has left the whole nation in shock…
But there is hope.
As the economy slowly begins to reopen, so do small businesses everywhere with their owners determined to adapt to these extreme conditions and keep their dreams alive. We interviewed multiple Asian-American small businesses to better understand how they are dealing with the effects of COVID-19 and have found that many are still able to function at a manageable level.
JiaYu Guo, owner of restaurant C&T Wok in Morrisville, NC, told us that COVID-19 has forced him to change his business strategies to accommodate safety regulations as well as maintain a stable profit margin to stay in business. This included altering work schedules, decreasing employee work hours, starting delivery orders, and creating promotional deals to incentivize the community to continue eating at his restaurant. However, there were inevitable aspects that were out of his control like the disruption of the food supply chain, which led to a major rise in prices of food products, and the commission that delivery companies charge. These new expenses that he now has to consider are cutting away at his net profit extensively which has forced him to take undesirable measures such as increasing his prices. According to Guo, he is currently “maintaining around 70-80% of his normal revenue” and while this rate is much lower than normal, he humbly considers himself lucky to have loyal and grateful customers who are continuing to order from him and support him.
Kevin Liu, co-founder and co-owner of Boba Baba in Cary, NC, told us that COVID-19 had initially required him to shut down for over a month and even when they reopened, their sales took a big hit causing them to lose almost half of their normal business. However, he takes an optimistic view on shutting down temporarily, saying that it has forced him to take a much-needed break to visit his parents. He explains that people can often be too engrossed in their jobs and careers that they forget to take a step back and focus on more important matters such as family and friends. In addition, Liu talks to us about how he also values his customers and does not want to endanger them by advertising his business extensively. When asked about any potential marketing strategies he may be considering, he answers: “In terms of reaching out to customers and getting more business flowing, it’s really also a debate of ethics and morals. We want to get business and increase revenue but we also don’t want a lot of people clumping here and getting infected […] You really have to value your customers. It’s not about the short-term ‘lets-get-a-lot-of-business-today’ mindset, it’s a long term thing. It’s a long term vision. As long as we’re not causing the virus to spread, then we’re okay with taking a hit financially.”
While most of the businesses we spoke to said they received Federal government aid, they attested that it was much less than expected and could not be relied on. As stimulus money and programs begin to trickle away, it was more so something that helps soften the initial blow. Many small businesses are at risk due to the effects of COVID-19 and for some, the outcomes are much worse. We’ve decided to compile a general guideline for businesses who are hoping to rebuild as they reopen to the public.
1. First, it is crucial that you check the financial damage that COVID-19 has caused for your company. You want to gauge just how bad of a shape you are in before you can determine what course of action is necessary. This includes gathering data and comparing the differences between pre-pandemic numbers and current numbers so that you can figure out crucial statistics such as incoming revenue, increased prices in supply products, possible new expenses, etc.
2. Once you have obtained this information, you can now determine whether you can operate similarly to how you used to or whether drastic changes to the business must be made in order to adapt to new circumstances. This will vary extensively based on what kind of business you own so it is crucial to understand all the factors that may affect your business. Understanding your consumer base and what potential pivots you can make in marketing are vital.
3. Once you’ve determined that, you can then consider whether your business will require loans to help keep it going. There are numerous COVID-19 relief programs (listed below) that are providing small businesses with loans that have extended payment periods, loan forgiveness, debt relief, and many other benefits. If your business will require additional capital to support the changes you’re making, then applying for these loans is a great option to keep in mind.
4. Now you can focus on maintaining a financial record of how your business is functioning. You’ll want to adjust your budget so that you can take into account the new expenses and revenues your company may have. This is very important as it will help you stay organized and give you consistent data on whether the changes you’ve made are effective or if you need to make different adjustments.
5. Finally, you want to make sure you create a timeline to represent your rebuilding process. It will be extremely beneficial to have a plan so that you can determine what your priorities are and so you can organize your goals.
A majority of the COVID-19 recovery process relies on the small businesses and what they plan to do but we, as members of the community, can also provide assistance. If it is possible for you, make sure you continue to consume products from your local small businesses. One of the main reasons many of these small businesses are suffering is due to the lack of sales and customers. Getting food delivered from local restaurants or ordering products from local stores are just two of many ways you can continue to help out. In addition, simply practicing and promoting safe habits can help streamline COVID-19 recovery. The sooner we get through this pandemic, the sooner the economy can fully reopen and the sooner small businesses can slowly start to operate at a normal level again. Crowding in public places and spreading COVID-19 will only drag this quarantine longer and nobody benefits from that.
One of the main reasons COVID-19 was so disastrous was because we, as a country, were not prepared. We were caught off-guard and did not do everything we could to defend against this virus, resulting in over 116,000 deaths. We need to make sure we have contingency plans set in place for the future. That way we can prevent these crises rather than repair their damages.
List of Resources
- Paycheck Protection Program provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program.
- EIDL Loan Advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties.
- SBA Debt Relief is providing a financial reprieve to small businesses during the COVID-19 pandemic.
- SBA Express Bridge Loans enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.
- Google Ads donated $340 million in advertising grants to support small businesses.
- GoFundMe has partnered with Yelp, Intuit QuickBooks, GoDaddy, and Bill.com to provide small business owners with the financial support and resources needed to continue running their businesses during and after the coronavirus crisis.
- Led by Hello Alice, with the support of Verizon, Silicon Valley Bank, Ebay, and small business owners and advocates across America, Business for All provides $10,000 to $50,000 grants, expert mentorship, a strong community, and a comprehensive suite of small business resources.
- Yelp announced $25 million in relief, primarily focused on supporting independent local restaurant and nightlife businesses, in the form of waived advertising fees, and free advertising, products and services, during this period.
- Beauty Changes Lives is giving $1,000 COVID-19 relief grants for licensed & future professionals in: cosmetology, esthetics, makeup, nail technology, massage & barbering.
- GlobalGiving is making at least 1,000 grants of $5,000 each to female entrepreneurs in the U.S. to help alleviate the impact of the crisis.
- Google is releasing a series of updates to help local businesses to adapt to the COVID-19. With these new sets of features, Google will allow small businesses to support themselves, including gift card sales, fundraising, or marketing their virtual services.
- American Express announced it has established ‘Stand for Small,’ a coalition of more than 40 companies across media, technology, consumer goods, professional services, and many other industries, that have come together to provide meaningful support to small businesses as they navigate the impacts of Covid-19.
