West Virginia is among about two dozen states that are in the process of reopening. At some point, the rest of the country will reopen. A lifting of economic restrictions is one thing, but the ability of hundreds of thousands of individual businesses to open, operate and be profitable during and after the pandemic is quite another.
Just keeping the doors open, even without a pandemic, is hard enough. The Bureau of Labor Statistics estimates that 20 percent of all new businesses fail during the first two years of opening, while 45 percent close within the first five years.
Now the businesses that have managed to make it this far face a gigantic economic hurdle that none could have planned for.
The National Federation of Independent Businesses, which represents about 300,000 businesses nationwide, conducted a random sample of some of its members. Here is what the organization learned:
Business cannot survive without customers, so it’s not surprising that nearly three fourths (73 percent) say they are very or moderately concerned about getting customers back.
Only about a third (34 percent) of businesses believe their local economy will be back to near pre-crisis levels by December. The largest percentage, 40 percent, say it will be sometime next year before they see business as usual.
Many businesses have furloughed or laid off workers. Most of the businesses, 63 percent, say they are not concerned about getting those employees back. But thirty-seven percent say they are very or moderately concerned.
One of the problems businesses are running into as they reopen is luring employees back to work. The temporary additional $600-a-week unemployment benefit means some workers make more off the job than on it.
Small businesses, which make up 99 percent of the businesses in West Virginia, have been able to take advantage of the federal Paycheck Protection Program that provides forgivable loans.
The SBA reports it has approved over four million loans totaling $523 billion nationwide. In West Virginia, nearly 15,000 small businesses have been approved for loans totaling $1.8 billion. The average loan size in West Virginia is $122,000.
These loans may be a life saver for many businesses, but they are only a temporary bridge. Ultimately businesses here and across the country need revenue, which comes from sales, which happen when customers have confidence in their own economic security.
How long that takes depends upon what course the virus follows and how well we as a country and as individuals deal with the pandemic.