As we move further into the new year, small business owners are facing numerous challenges including financial impacts and political upheaval. These challenges have resulted in a need for small business survival strategies such as being aware of debt service needs, managing inventory and supply chains, planning cashflow projections, and expressing their needs to elected officials. Moreover, elected officials can support the economic recovery by avoiding new regulations that increase business costs, promoting economic development, and maintaining a sound financial economy. Despite these unprecedented challenges, with careful planning and support, small businesses can navigate these uncertain times and contribute to the region’s economic recovery.

Challenges Facing Small Business Owners

As we progress further into this New Year, many small business owners cannot help but have the feeling that they are sitting under, not one, but rather several Swords of Damocles.

Financial Impacts

Studies report that there is a tremendous amount of pent-up consumer demand that, when unleashed, will drive the economic recovery to even greater heights. However, small business owners are facing various financial impacts:

  • The cost of newly acquired debt through the EIDL program and the potential for less than full forgiveness under the PPP Loan program.
  • The cost of previously waived or deferred charges such as rent and lease payments, supplier credits, and lines of credit that have been taken in order to remain in business.

Political Upheaval

At the federal and state level, small business owners are facing political upheaval due to recent elections. Talks about increasing the minimum wage to $15 per hour and other regulatory changes are causing concern among small business owners.

Strategies for Economic Recovery

Small business owners can take several steps to help ensure the region’s economy recovers:

  • Be cognizant of debt service needs and the impact of PPP loan forgiveness
  • Carefully manage inventory and supply chains
  • Do a cashflow projection for the next twelve months
  • Plan to shore up cash reserves on your balance sheet
  • Communicate your needs to elected officials

Recommendations for Elected Officials

Our elected officials can also assist in the region’s economic recovery by:

  • Avoiding enacting new regulations and legislation that increases the cost of doing business
  • Being pro-economic development
  • Maintaining Virginia’s “Right to Work” status
  • Keeping the State’s economy on sound financial footing
  • Avoiding efforts that promote additional regulation, unnecessary litigation, and levies for small businesses

Conclusion

Small business owners are facing unprecedented challenges, but with careful planning and support from elected officials, they can navigate these uncertain times and contribute to the region’s economic recovery.

Jim Carroll is the Vice President for Small Business for the Hampton Roads Chamber and the Executive Director for the Small Business Development Center of Hampton Roads. The SBDC’s mission is to support the region’s economy by promoting and facilitating small business growth. The Center serves the eighteen cities and counties of southeastern Virginia and the Eastern Shore. He can be reached at (757) 664-2595 or jcarroll@hrchamber.com.

Question & Answer

What are some of the financial impacts small business owners are facing?

Small business owners are dealing with costs related to newly acquired debt through programs like EIDL and PPP loans, as well as deferred payments such as rent, supplier credits, and lines of credit.

What political upheaval are small business owners currently encountering?

Small business owners are facing political uncertainty due to recent elections, with discussions around potential minimum wage increases and regulatory changes causing concern.

What strategies can small business owners implement for economic recovery?

Small business owners can manage debt service needs, inventory, supply chains, and cashflow projections, as well as communicate their needs to elected officials for support.

How can elected officials support economic recovery for small businesses?

Elected officials can help by avoiding new regulations that increase business costs, promoting economic development, maintaining a sound financial economy, and supporting the “Right to Work” status.