15 Ways It’s Become Tougher Than Ever to Run a Small Business

Even before the COVID-19 pandemic, being a small-business owner came with plenty of challenges, particularly in a world increasingly dominated by behemoths like Amazon and Walmart, and the rise of e-commerce. Enter a deadly global health crisis that necessitated stay-at-home orders, personal protective equipment, and months-long closures, and life for small-business owners suddenly became an experience ranging from overwhelming to downright soul crushing. Here are just some of the things that have made it tougher and more perplexing than ever to run a small business.

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Operating a bricks-and-mortar business amid COVID-19 has meant implementing comprehensive cleaning and sanitizing programs, which are not cheap. And for small businesses that run on tight budgets, the added expense has made a difficult situation even more challenging. "Small businesses run tight ships when it comes to budget, and they don't have the overhead large companies do. So, what may seem like small expenses to other businesses — all the extra cleaning services — can really take a toll on smaller companies," says Jordan Peagler, who operates a small, California-based law firm, MKP Law Group. "I think the most difficult thing for small business is finding ways to keep their head above water and survive hard times."

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Yet another sign of the times, when the economy is contracting amid a global pandemic, businesses are hesitant to give away any excess work. "We used to rely on the overflow of bigger law firms to gather cases. However, that stream dried up quickly once COVID-19 restrictions fell into place," says Peagler, of MKP Law Group. "Big firms were worried about hard times and so they held onto every case rather than sharing them with small firms such as ours."

Two words: social distancing. Or better yet, stay-at-home orders. These combined realities have had a profound impact on small businesses and their ability to provide service to existing customers and clients, and attract new customers. Not to mention the challenges they pose when it comes to maintaining team synergy. "Our clients often are suffering from physical injuries or emotional trauma, and we need to be available to help them through their difficult time," says Peagler. "In addition, small businesses such as ours rely a lot on camaraderie and good spirits. Everyone must work together and pull extra weight in order to keep the business moving along. The pandemic threw a wrench in our processes and structure, so we had to quickly figure out how to develop a new normal."

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Maintaining team synergy isn't the only issue posed by remote operations for small businesses. Relying on technology and the smooth functioning of online communication platforms can also make day-to-day operations more challenging. "Since my team and I are all physically apart, we have to rely on collaboration tools like Slack and messaging systems like Line," says Antti Alatalo, CEO of SmartWatches4u. "All it takes is a technical glitch on one member's end, or a blackout, or one member taking longer than usual to respond, to disrupt the entire flow of communication. When communication comes to a halt, the work stops."

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With social distancing ruling the day, millions of Americans are doing everything from shopping to taking exercise classes from home. Small businesses that may not have previously considered a web presence have suddenly migrated online en masse. That shift has dramatically increased competition. "Due to the effects of the pandemic, many businesses now are boosting their efforts to grow their brands' e-commerce division. This translates to a bigger challenge for small brick-and-mortar businesses, as it means that their fellow physical stores are not their only competitors anymore," says Allan Borch, founder of Dotcom Dollar.

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Connecting with your target audience and staying on their radar is difficult under the best of circumstances. But suddenly that one task has taken on a life of its own. "Reaching your audience is not a piece of cake, especially during a pandemic like this, when almost all businesses resorted to online platforms in order to succeed on their objectives," says Jason Hughes, CEO of Vegan Liftz "We've got huge competitors, and standing out becomes the real challenge."

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In 2020, the average small business laid off or furloughed 27 percent of its staff, according to a survey from OnPayPayroll. "That means many business owners are trying to do more with less, and that their top priorities have become focusing on the most productive activities and finding efficiencies," says Elliott Brown, of OnPayPayroll. "This focus is fundamentally altering the way many businesses operate."

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To say the political climate in this country has become polarized would be a vast understatement. And small businesses have not escaped the growing divide unscathed. Navigating the tense climate has become a hurdle of its own. "We have employees with diametrically opposed political views, who are not afraid to share their feelings and thoughts in meetings. They are entitled to do so by law, but it has created serious tension at work," says John Ross, CEO of Test Prep Insight. "In my opinion, it has actually poisoned our previously positive culture. In turn, this seems to have affected our growth and productivity. I'm sure the internal strife among employees over politics is a major thorn in the side of many small-business owners right now."

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The massive migration online has caused more problems than simply increased competition. It has also meant a shortage of technical support for some small businesses. "With massive numbers of companies shifting operations and business online, there is a shortage of web developers out there right now," says Ross, of Test Prep Insight. "Our usually steadfast web development agency has been swamped with new work and unable to give us the level of help and attention we previously received. This has slowed website updates and changes that we need made."

There have been numerous stories documenting the unfair way funds were distributed from the Paycheck Protection Program — with megachurches flush with cash and large corporations with deep financial reserves receiving money ahead of small, struggling businesses. Data from the Small Business Administration shows billions of PPP dollars went to wealthy businesses that were more likely to be white-owned and well-connected. That fact has not made it any easier for small businesses to survive amid a difficult economy. "I think it is appalling the way the Paycheck Protection Program has been handled," says Dan Bailey, president of WikiLawn Lawn Care. "Corporations continue to get tax breaks and government aid they don't need. Amazon isn't paying taxes at all, and yet small businesses that need help the most are left out in the cold. Especially small businesses owned by members of marginalized communities."

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The pandemic has also made it harder for small businesses to qualify for financing, says Jim Pendergast, senior vice president for altLINE, a division of The Southern Bank Company, which manages commercial specialty financing. "In fact, in 2020 we saw a new calculated low of four out of five business owners' loan applications being denied by financial institutions," says Pendergast. "It's worth noting that many of these businesses are those that had already applied for the federal government's PPP loans as well as those from the Economic Injury Disaster Loan program. But as we know from the SBA's release of PPP program data in early December, the efficacy of PPP truly helping small businesses is questionable."

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The supply shortages caused by the pandemic are legendary. And in addition to millions of households not being able to find the products they want and need (toilet paper, anyone?), small businesses have faced challenges also. "Very few small businesses have been able to get away without suffering from disruption in their supply chain due to COVID-19," says Catherine Erdly, founder of The Resilient Retail Club. "As well as disruption to postal systems over Christmas and also general customer dissatisfaction due to higher stress, there are lots of reasons why small-business owners, especially those who sell products, are finding it hard right now."

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Business development amid a pandemic that requires social distancing is no easy task. Long gone are the conventions, trade shows, and professional gatherings where crucial connections were once made. "We were very active in international game-development conventions, always managing to establish new business contracts when our company attended such events," says Tom Winter, chief revenue officer and co-founder of DevSkiller. "Now that such events have moved online, it's a very different playing field to represent your company and your capabilities. Our pipeline may be alright today, but down the line, we will need to find more projects. This lack of access to traditional avenues of business development and networking is really hurting our young studio."

One challenge nearly every small business faces amid the pandemic is the difficulty of reliable forecasting, says Andrew Schrage, CEO of Money Crashers. "Many small businesses put together revenue and cash flow projections at the beginning of each fiscal year. While these aren't gospel, they're usually within the bounds of known experience and therefore usable — if not always super-accurate in retrospect," says Schrage. "The problem this year, of course, is that the known experience is not useful with so many unknowns lurking ahead: state and local restrictions on certain types of business activity, unpredictable consumer spending patterns, questions about the potential for, and details of, further state and federal economic stimulus, and the overarching questions about the trajectory of the pandemic itself."

Ah, 2020, it presented so many new, unique, and complex challenges. To mask, or not to mask? Politics. Social distancing. Racial injustice and strife. Protests filling the streets. The list is endless. And none of it has been lost on those at the helm of small businesses across America. "One of the ways that running a small business has gotten harder for me is knowing when I should take a public stance on something that's not 100 percent related to my business," says David Waring, CEO and co-founder of Fit Small Business. "Prior to 2020, if anything even smelled like it could be political, it was off-limits for both myself and others at my company. That all changed for me when I felt things moved from being potentially political to what's simply morally right and wrong … For these reasons, I decided to take the more difficult path in 2020 of considering when and when not to speak up, which included both publicly condemning the murder of George Floyd as well as the recent attempted takeover of the capital and President Trump's role in inciting that violence."

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