Small Businesses Might Be At A Point Of No Return

Seakor+Polish+Delicatessen+%26+Sausage+Factory+is+closed+due+to+COVID-19+pandemic+on+March+22+in+San+Francisco%27s+Richmond+District.+

Gianna Sozzi | The Skyline View

Seakor Polish Delicatessen & Sausage Factory is closed due to COVID-19 pandemic on March 22 in San Francisco's Richmond District.

Many small businesses have been suffering since multiple counties in California announced a stay-at-home order. 

Large chains and small retailers had to close their doors in California on the week of March 16th due to the growing pandemic of COVID-19. 

The smaller businesses that have closed might be at a point of no return. A week or two of no revenue could be a dramatic cost to these small businesses. 

Large chain stores have the corporate backbone that they need in order to sustain themselves but even they are suffering at this moment in time.

How will things look in the near future for the Bay Area?

Right now everything is uncertain. Gov. Gavin Newsom said that he expects 56 percent of Californias to become infected with the coronavirus within the next two months. 

This means that the closures of retail stores that are “non-essential” might have to remain closed. Already, many people have been laid off of work permanently as some businesses have had to completely close their doors or cut down on hours.

San Francisco and the rest of the Bay Area is not a very affordable real estate market, stores already struggle with getting people into their doors. The rent is too high and the sales are relatively low, in most cases. 

As a matter of fact, the internet has also changed the way people shop. The internet was already a challenge for stores to get foot traffic, but now it has become even worse. 

Most Bay Area retail stores depend on the massive amount of tech workers to make purchases, but those same tech workers that work for Salesforce, Twitter, Google, and Facebook have been told to stay at home and work from their home. 

Even though there are talks about rent being delayed or “frozen” it is still something that everybody must pay at some point. As of now, small businesses that have been affected by COVID-19 can take out a “disaster relief loan.” However, that is just what it is, a loan. It has to be paid back, even though the COVID-19 pandemic was not their fault.  

How are small businesses going to be expected to pay for such loans? They’ll have to work harder to make up this money if that opportunity even arises. 

There is much uncertainty right now.

Berkeley is even creating a fund to save their small businesses. The root of this problem is that we have to spend so much to keep businesses running in places like the Bay Area. 

Because the cost of living is so high, there is no space for small businesses to have any kind of financial safety net.

A CareerBuilder survey found that 78% of U.S. workers live paycheck-to-paycheck. People will not be able to go out and spend money that they have not made because they have been out of work. The only small businesses that are benefiting from this are those that sell hand sanitizers and Lysol wipes, but even they can’t keep the stock up for those items that sell out quickly. 

Small businesses will have to really strategize how they’ll make up for their lost money, it will be hard to do and for some, this might just have been it.