Just because businesses are small does not mean they are simple and easy to fix. Small business owners, especially the vast majority that are at micro-level, are individual dynamos. They are workers, managers, executive decision maker and frequently local business leaders. Their businesses create jobs, hire contractors, pay suppliers for goods and services all to satisfy demanding customers. Each business has its own ecosystem which creates value for the company and the local economy where they operate.
To limit the loss of value in goods and services that communities will lose if we let thousands of small businesses close will require more than just loans. Systemic solutions are needed on three levels.
- Help small businesses do more than stay afloat without adding further debt. In consumer service industries like catering, hospitality, travel fundamental changes are required for these businesses to survive beyond the Covid-19 pandemic. We need more creative use of grants, zero interest loans or forgivable loans are needed to fund business restructuring or reinvent costs to business owners
- Invest in the developing local business ecosystems across business districts and regions. It is not enough to just focus on Business improvement districts and the needs of property owners and business owners. Business owners are a vital segment of supply chains, educational systems for hiring and a source of distinctive goods and services to the community. Now is the time to bring all the silos in local economies together to rethink the support structure for small businesses.
- Small business owners are people with families, not corporate entities with legal structures and big cash reserves to protect them in economic downturns, let alone a public health crisis and deep recession. Survival of decades of commitment to operating local restaurants, retail stores, etc. are demands constant attention and drains personal assets and resources too often. I am pleased that the Aspen Institute and the Stanford Latino Action Network is encouraging research into the condition of business owner families. The research is focusing on financial condition and benefits like health care and unemployment insurance. The results are that the law protects employees and owner families frequently have few benefits of their labor than their employees do.
Transfer of management and ownership across generations is rarely considered in small business circles. This transfer of family power, decision making authority and management of financial resources is a complex social, psychological as well as business and legal process. The transfer of wealth to future generations especially in immigrant and lower income communities is vital to the health of the business district. When we lose businesses that have been job creators for decades in ethnic communities the blow is severe. Services to businesses need to go beyond just business, financial, operating management and formal exit planning. Family and multi-generational wealth transfer and community health are at stake.
Multi-disciplinary and multi-cultural mindsets are needed to develop innovative and outcomes-oriented solutions are required to sustain the U.S. small business sector which generates close to half of Gross Domestic Product with extraordinarily little support beyond loans and financial and business advising. Imagine what the contribution of small business could be to the economy with comprehensive and multi-dimensional development and creative funding!