Small businesses have been impacted by COVID the most. The outbreak of COVID in the United States affected businesses and employees, as well as consumers. Small businesses were affected the most as they were the ones with the least amount of resources and manpower. And as a result, the government has come forward with different programs like ERTC or Employee Retention Credit and PPP to help businesses that have been affected by the government-imposed COVID restrictions.
Employee Retention Credit is a federal government program to help businesses affected by COVID restrictions. This program offers a reward to employers who have retained their employees on the payroll during the outbreak of COVID.
Let us now look at different ways COVID impacted small businesses.
1. Supply shortages
When COVID first spread, one of the most affected areas is the supply chain. Many companies had to close down and lose hundreds of employees because of the COVID restrictions. The restrictions on imports made it hard for companies to source supplies from outside the United States. In addition, the shipping restrictions limited supply from sea ports as well as airports. This meant that a lot of small businesses had to close down due to the lack of inventory and supplies.
2. Demand shortages
The purchasing power has been reduced as people as a whole are affected by the COVID outbreak. This resulted in less demand for products and services, therefore, the companies that remained open saw a decrease in their sales.
3. Government restrictions and protocols
Government agencies imposed different restrictions and protocols to control the outbreak of COVID. These restrictions include travel restrictions, shipping restrictions, and importation. Businesses were prevented from operating efficiently because of these government-imposed rules.
4. Supply chain disruptions
Different businesses in the supply chain experienced disruptions that were a result of the COVID outbreak. The main areas that were affected included transportation, shipping, and customer service.
5. Shutdowns of importers, exporters, and manufacturers
The outbreak of COVID led to a rise in shutdowns and bankruptcies in the importing, exporting, as well as manufacturing sectors. This was due to restricted trading, shipping, and travel.
6. Reduced workforce
The COVID outbreak resulted in a reduction in the workforce in the business sector. There were various reasons for this. One was the number of sick days because of COVID symptoms. Another reason for the reduction in the workforce was that many companies had to close their doors due to different reasons.