The Pandemic That Ended It All: How Small Businesses Were Demolished In 2020
Currently, the world is experiencing a global pandemic of COVID-19, caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). Originating from Wuhan, China, this disease has been confirmed in over 210 countries with approximately 62.5 million cases worldwide as of November 27th, 2020. In Canada, despite reporting its first case in late January 2020, it was not until the first few weeks of March they began announcing strict measures to battle this virus, including closing schools and restaurants. Aside from the fears of getting sick, the pandemic has had an unprecedented influence on the Canadian economy, adding more and more stress for small business owners.
Employee hours, shifts, and wages have been decreased. Entrepreneurs and small business owners are being forced to take serious steps in order to continue operating their business. Sales have fallen, owners were forced to temporarily shut down operations, reducing operating expenses, laying off employees, applying for credit are just a few of the many things small-business owners are having to do right now and have already done.
The smaller the company, the harder the hit, with companies with fewer than 20 employees most affected. This is because a small business with fewer than 20 employees typically lacks proper cash flow and capital. Those companies were the first to lower hours for employees or lay off staff members.
The Canadian Federation of Independent Business (CFIB) has been tracking the condition of small businesses throughout the pandemic as they are dedicated to supporting small businesses through this COVID-19 crisis. Also, a survey conducted by the Chartered Professional Accountants Canada found 40 per cent of respondents have seen revenues drop approximately 70 per cent or more while 60 per cent have seen revenues drop by at least 30 per cent.
A myriad of small businesses owners have reported that sales have decreased and some have had to temporarily shut down operations completely. For example, Dufflet Pastries closed its doors in May after operating for 18 years. Moreover, several small business owners have made substantial changes to combat the COVID-19 pandemic such as reducing operating expense and laying off staff members. Many business owners feel it will take a year or two to get back to pre-COVID business volumes.
In conclusion, as the fallout from the coronavirus pandemic comes into sharper focus, the position of the nation’s small businesses appears, overall, to be particularly tragic. With decreasing revenues and continuous layoffs, small business owners are unsure when their businesses will get back to pre-COVID business volumes.
