How the Pandemic Helped Small Businesses Reach Their Full Potential
By Alissa Chooljian, Staff Writer
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In March 2020, COVID-19 forced society into a state of reclusion. People fought to gather the most basic of necessities – toilet paper briefly being the star of it all. With delayed delivery services and mandated closures of shopping centers, entrepreneurs and business owners struggled to find ways to keep their businesses afloat. These Business owners do not only consist of fat cats and rich uncle pennybags. Rather, a large number of the economy is occupied by small businesses: businesses which employ 1-99 employees [1].
Throughout the pandemic, a worrisome problem arose: profits of major corporations exponentially increased, whereas those of small businesses began to deteriorate under the burdening weight of the lockdowns. One of the most noteworthy businesses to not only prevail, but reach never-before achieved profits is Amazon, a retail company founded and owned by Jeff Bezos. Within a span of five months, from March 2020 to August 2020, Bezos’ wealth increased by a staggering $92 billion [2]. Amazon’s success during the pandemic can be explained by two factors, (1) the company markets and sells essential items such as food, toiletries and even medicine, and (2) it is an online department store available to the world’s most powerful and wealthiest countries. Other business owners whose revenue soared during the pandemic include Mark Zuckerberg and Elon Musk [3]. To understand the relation of this massive success to small businesses, it must be noted that there is a large positive correlation between online businesses and higher profits. This is due to the accessibility that online stores offer consumers. Additionally, because of their high versatility and accessibility, online stores were among the less vulnerable during lockdowns, compared to brick and mortar stores.
Most small businesses before the pandemic consisted of local shops, restaurants, and kiosks. During the lockdowns, these businesses were given two options: (1) continue paying rent for a non-usable shop and risk dragging your business into bankruptcy, or (2) join the e-commerce network and transform the business into an online shop. Unfortunately, the former was the more popular choice. In early 2021, it was reported that seven-in-ten small businesses in Canada had fallen into debt due to the implications of the pandemic [4]. Collectively, the small business industry in Canada owed an astounding 135 billion dollars [4]. This has a significant negative impact on the economy and Canadians were encouraged to shop locally to help with the recuperative process [4].
But what did Canadians and Americans learn from this?
In the aftermath of the lockdowns, there was a seismic shift in the small business industry. In June 2020, Statistics Canada reported record high unemployment rates of 13.7%, more than half-a-percent increase from the unemployment rates in 1982 [5]. These rates did not go unchecked. Canadians along with Americans scrambled to find new flows of income to support themselves and their families. According to a study conducted by GoDaddy, approximately 2.8 million more online businesses were created by Americans in 2020, compared to 2019 [6]. This led to record high self-employment rates among Americans; rates higher than those of the 2008 recession [6].
This great rise in online businesses is not just beneficial to the economy. It also allows Canadians and Americans to regulate their own working schedules, allows for alternative streams of income, and provides them with a way out of the corporate world.
Although the COVID-19 pandemic was a tumultuous time for small business owners – even causing many to close their doors – there was nevertheless a bright light at the end of this harrowing tunnel. Today, it is easier than ever to create an online small business; it is more efficient, more cost-effective, and more accessible for both the business owner and the consumer. Websites that offer creation and development services of online small businesses include GoDaddy, SquareSpace, Wix, etc. [7].
To bolster the economic sector of small businesses, there are a plethora of things the average person can do. Social media has become one of the most powerful tools for marketing. Thus, sharing posts and advertisements of our favourite local small businesses can help boost the sales of small business owners. Additionally, writing reviews and sharing our experience with the business can encourage others to support the business as well [8].
The pandemic hit hard for a lot of us, but it also gave rise to something wonderful. Today, anyone with a dream and a little dedication can start a business, and that is something to be celebrated and encouraged.
