Fall 2020 Small Business Impact Update - Gene Marks

I write weekly about issues concerning small businesses for several publications. The next topic I will be writing about is small business closures. When you hear about retailers, restaurants, fitness centers, and the travel industry there is no doubt they are hurting in 2020. But this is also a big country with 30 million small businesses spread across many verticals. This means there are still a lot of small businesses out there that haven’t been impacted as greatly by the COVID-19 pandemic. 

A key reminder when you’re looking at numbers though is how they compare to other related measures. The three biggest government agencies that report statistics on small businesses the Chamber of Commerce, the U.S. Census Bureau, and the Small Business Administration (S.B.A) all report 7 to 9 percent of U.S. small businesses close each year. There are about 30 million small businesses in the U.S. and around 6 million of those businesses have employees outside of the owners. Even if you take a 7 to 9 percent closure rate of those 6 million employer businesses that it about five hundred thousand businesses close each year. 

The silver lining is when there are economic downturns it also creates opportunities for some businesses to grow or new businesses to start. Businesses have had to learn to adapt to working virtually and leverage technology to run their business. Online sales have increased 28% year over year in 2020, which means businesses have had to pivot from selling products only in-store to selling online as well. 

I lot of people that received PPP loans in the Spring are starting to work out how to get them forgiven because those loans are starting to come due. You need to go back to your lender or bank and fill out the forgiveness application. Be careful if you get your loan forgiving though as there is a tax implication here. Whatever expenses you covered using the PPP funds will not be deductible on your taxes. This means your taxable income this year will be greater than you might normally expect to pay. Make sure to talk to your accountant early so they can help you prepare and know what to expect on your taxes. 

Some of the technology categories that have become mainstream today are virtual meeting platforms, customer relationship management (CRM) applications, cloud-based accounting systems, and office systems in general like project management or HR applications. One of the biggest problems business is facing though is security so you need to partner with an IT firm to ensure the systems and tools you are using are updated and secure. 

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