Summary

Small Business Management

According to Fairlie (2020), small business owners were severely affected by the COVID-19 pandemic, which led to various restrictions in public places to mitigate its spread. The policy of social distancing restriction caused a demand shift, resulting in the shuttering of many small businesses. Many of the business closures might be permanent because of the owners' expenses as they tried to finance it during the crisis.

Fairlie (2020) argues that there is no adequate information about the effects of the pandemic on small businesses and entrepreneurs due to a lack of timely data from the government. However, various studies have been conducted to confirm the adverse effects of the pandemic on small businesses. The studies reveal that the number of small businesses drastically reduced in February 2020 because of the restrictions related to COVID-19. The working days also declined to 2 or 4 days per week, with hours dropping by 29%. The pandemic also affected gender and race at different rates. The African-Americans got enormous losses forcing the closure of 41% of businesses. Immigrant entrepreneurs also suffered a significant decrease in business activity with 36%, while female entrepreneurs also faced a disproportional decline of 25%.

The most industries that suffered a significant drop include construction, hotels, restaurants, and laundry and transportation service providers. Agriculture was the only business not struck by COVID-19 restrictions (Fairlie, 2020). However, data reveals that all small businesses across demographic, ethical, and gender groups were not immune to the negative impact caused by the social-distancing restriction. However, it is not possible to determine whether the status of the closure of the business is permanent; each month of inactivity hurts the small business owners and the economy.

References

Fairlie R (2020) The Impact of COVID-19 on Small Business Owners: Evidence from the first three months after widespread social-distancing restrictions Available: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7461311/