For Small Business to Survive, It Needs the Right Kind of Help

For Small Business to Survive, It Needs the Right Kind of Help
(AP Photo/Eric Gay)
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Coronavirus has turned the economy upside down, especially for millions of small businesses in Texas. To clarify, this isn't about some small businesses that aren't actually small, like NBA franchises and hotels associated with major hotel chains. Small for the purposes of this essay is local restaurants and retailers, plumbers and small manufacturers that have five, 15 or 50 employees – and that work hard every day to satisfy customers, pay their bills, and make payroll.

Embracing digital tools and e-commerce is the best way for many businesses to survive the Covid crisis, and to emerge from it poised to grow and really succeed. Since the shutdowns started, millions of small businesses have improved their websites, focused on their Facebook and Instagram feeds, invested in digital advertising, and taken their business online. Digital is helping businesses stay alive and keep at least a few employees on payroll.

Some in the government are truly working hard to aid this rapid transformation, but missteps and missed opportunities are frustrating. For example, Congress has set aside nearly $700 billion for small business loans and grants. But it failed to adequately define "small," only for professional teams owned by billionaires and publicly-traded companies with top-notch capital-market access to compete with family-owned restaurants and retailers for limited resources.

The Small Business Administration and state unemployment offices are working overtime to support small employers and laid-off employees, but their websites are overwhelmed by millions of applicants. Had governmental offices prepared in advance by signing up with Microsoft or Amazon cloud infrastructure, many of their website problems would not exist.  

In Texas right now, hundreds of thousands of small businesses are using digital platforms and business tools to stay connected, stay in business, and stay safe while working from home. Washington, D.C. and Austin should be doing everything possible to support those businesses. It is nonsensical then, that some in Congress and Attorney General Ken Paxton are investigating and threatening the digital companies that provide small businesses with valuable online resources. Paxton's misguided investigations threaten to disrupt digital platforms exactly when Lone Star businesses need them most. These are not normal times; it should not be business as usual.

We also know that everyone is focused on re-opening the economy. We must be mindful, however, that governments can permit businesses to open but they cannot require them to open. We advise small business owners to trust their own judgment, and to keep storefronts closed if they don’t feel safe or don’t think their employees and customers are safe. The road to recovery will be paved by hard work, experimentation on a business-by-business basis, and patience. 

Usually, less government is best. But at times like this when government is a certainty, we need it to operate with great precision. Policymakers should focus on what people and small businesses need immediately, while also mindful about not hindering commercial activity. This includes policymakers not pursuing policies that hurt small business by diminishing the value of their lifeline digital platforms. This is precisely the wrong policy amidst a public health and economic crisis that is challenging small businesses right as they strive mightily to survive. 

Jake Ward is President of the Connected Commerce Council, a small business support and advocacy organization based in Charleston, South Carolina.

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