The pandemic has devastated many of New Jersey’s small businesses. In fact, there are 30 percent fewer small businesses open in the Garden State today than one year ago, according to the latest business outlook survey by the New Jersey Business and Industry Association.
Other NJBIA findings are similarly grim. “Our survey found that sales and profits were way down for a majority of our businesses in 2020,” says Michele N. Siekerka, president and CEO of the association. What’s more, 59 percent of the more than 1,000 respondents said Covid-19 forced them to reduce expenses and overhead in 2020. Expense cuts included salary reductions, furloughs and layoffs. Now, even benefits are at stake.
“Out of the 72 percent of respondents who offered health insurance to their workers in 2020, 28 percent of them said they’ll discontinue that coverage in 2021,” Siekerka says. “This is an eye-opener and something that our policy makers are going to need to look at in terms of assisting businesses who want to provide health benefits, but simply can’t do it anymore as a result of the pandemic.”
Looking at individual industries, the survey found that 93 percent of those in the healthcare industry said they experienced decreased earnings through the first eight months of 2020. In transportation, 90 percent reported the same. The restaurant and hospitality industry was hit hard also, as were businesses like dance studios, yoga studios and gyms, which have had to contend with capacity limitations.
Kika Wise, the owner/operator of two Kika Stretch Studios in Montclair and Morristown, had to shut down completely for three months at the height of the pandemic last spring. At the time, she furloughed seven employees, but was able to hire five of them back once she received funds under the federal Payroll Protection Program.
Even when the studios reopened, some of Wise’s regulars paused their sessions. More recently, however, she has seen a surge of new clients.
“Our revenue has almost returned to pre-lockdown levels,” Wise says.
For Wise, keeping the Kika Stretch staff safe and motivated was key to riding out the pandemic. “It was very hard at first to deal with the fact that we were forced to close. We’ve been open for almost 10 years. Once we saw our clients wanting to come back, I was inspired again.”
Wise’s advice for other small businesses? Get creative and ask your customers how you can serve them best during this difficult time. Also, she says, businesses should tighten their budgets and look for inexpensive ways to reach their customers.
“We found ways to connect with people online at a lower cost by speaking in community groups and posting meaningful content that our consumers could use,” says Wise, whose company also has franchised locations in New Jersey and five other states.
Siekerka says many of the challenges and struggles of 2020 can be expected to continue into 2021. Business owners, she says, will hold their breath until the spring, when the good weather comes and vaccines are more widely available.
Looking ahead, Siekerka says 46 percent of the surveyed businesses “anticipate increases in sales in 2021, compared to 23 percent who foresee fewer sales.”
Siekerka is encouraged by the many New Jersey entrepreneurs who have redefined their business models to increase their chances for sustainability. “These have been incredibly difficult times,” Siekerka says, “but we know they can’t last forever. We hope there is more relief on the way. We know there are vaccines on the way. Our businesses just need to keep up the good fight and hang on. This will turn around.”Click here to leave a comment