COVID-19 dealt an unprecedented challenge to American small business, and more than half believe recovery will take most of 2020, according to U.S. Census data. While the crisis created major challenges around health and safety, the biggest impact for many businesses is financial.

Recent Wells Fargo research showed that even though most small business owners said things were “going well” prior to the crisis, they’re now struggling. Many called the outlook “bleak,” especially if they didn’t have an online presence. As businesses wait to see what economic recovery might look like, early signs show it won’t be linear: Businesses may be open one day, then closed the next if cases increase. And what “open” means may continue to change.

The closures and changing parameters often translate to lost revenue. However, many small business owners also told Wells Fargo that the crisis presents some type of opportunity. The key to staying afloat financially may be resourcefulness and resilience, thankfully a common trait among small business owners.

Let’s look at how small businesses are coping financially, as well as what you can do to help balance day-to-day financial concerns with future uncertainty and long-term growth.

Prepare for unpredictability

One of the most challenging parts of COVID-19 is the uncertainty. So much is unknown about treating the disease and when a vaccine will emerge that planning ahead can feel daunting.

Although you need to stay informed, the constant drumbeat of bad news and speculation can be overwhelming. Try to pinpoint what’s most important to your business by checking news and social media just once a day and subscribing to newsletters from trade associations in your industry, where they’re likely to share only the most relevant pieces of information.

Keep in mind that unpredictability doesn’t need to lead to an overhaul of how you do business. Most small businesses are continuing to manage their finances as they did before COVID-19, Wells Fargo research found.

But in addition to basics, like cash flow analysis, try taking your financial planning a step further by creating sales forecasts for your business based on different potential outcomes. If you’re keeping up to date on news and industry trends, it’s likely you have a few “what if” scenarios in mind, so try putting numbers to them and doing some analysis for how those various scenarios will affect your finances.

Some businesses may find that pent-up demand fuels business. Alternatively, if the outlook is not as sunny, you will have a firm grasp of what expenses need to be cut and actions need to be taken for your business to keep operating.

COVID-19’s financial impact is complicated

As of Q2, 2020


of small businesses said they were negatively affected.1


of small businesses said their financial situation is somewhat or very good.2


of small businesses expect their finances to be somewhat or very good by summer 2021.3

1. US Census Small Business Survey; June 21-27, 2020.
2,3. Wells Fargo Small Business Survey; Q2, 2020.

Find opportunities in crisis

As the pandemic economy continues to evolve, be on the lookout for potential opportunities. Chances are you have already made some modifications to how your business operates (some eight in 10 small businesses have).

Ideally, the changes you make now are things that turn into long-term additions to your business that can boost your revenue stream well beyond the COVID-19 crisis. Consider Molly Moon’s Homemade Ice Cream in Seattle, Washington. Owner Molly Moon Neitzel told NPR she had to shut down completely and lay off all her employees. But by selling sweatshirts online, as well as cards that could be redeemed for ice cream in the future, she made nearly $80,000 — enough to fund health insurance for laid-off employees.

Moon Neitzel also did what many small business owners are grappling with: She pivoted. She increased the number of sales she made to supermarkets, versus at her scoop shops, and is trying to find a balance that will keep the business going through 2021.

Expand your online footprint

While many businesses are looking at online sales as an opportunity, marketing isn’t the only area where going digital can help small businesses.

COVID-19 also motivated many businesses to do more banking online, whether it’s accepting new forms of contactless payment or increasing their online transactions with banks.

Going online can make banking easier during social distancing. It can take time to get comfortable with digital banking if you’re used to face-to-face interactions. But the switch may help you in the long run. Trends show the U.S. is moving away from cash and toward automation. COVID-19 could be a catalyst that pushes consumers even further toward cashless payments.

Take a look at how your customers usually pay and how you bank, and see if there’s a way to streamline how you accept payment, make deposits, and manage transactions, since this could help you not just during the pandemic but well into the future. The speed of these transactions and their ability to link with various accounting software can also make it easier for you to stay on top of cash flow and manage your finances in real time.

Plus, banking online can help protect your business if your area experiences new shutdowns that prevent your bank from keeping branches open. If you have questions about setting up online banking, talk to your banker.

Take advantage of the help available

Many small businesses applied for and received Paycheck Protection Program (PPP) funds from the government. And it’s possible you applied for additional funding as well, via the government, nonprofit, or private sources.

Managing those funds strategically can help you take full advantage of the benefit as you navigate uncertainty. Staying organized is the first step. Make sure you document where the funds are going and keep track of your finances during the period you received them. This can help later when you apply for loan forgiveness or navigate repayment.

It’s also important to remember that PPP isn’t the only program created to help small business owners through the crisis.

If you’re still worried about your bottom line, consider alternative funding sources, such as the Opportunity Finance Network or grants from large corporations aimed at boosting small business. Some city and state governments have created local financing programs.

Grant funds may be available for women-, veteran-, and minority-owned business owners. Check with your local Small Business Development Center for more information.

Crowdfunding may also be an option. In Chicago, Namaskar Yoga Studio ran out of money because of COVID-19–related shutdowns and created a GoFundMe to raise capital to reopen. The studio had created such loyalty among the community — bolstered by the decision to pay teachers through the crisis despite a closure — that a student shared the fundraiser on Nextdoor. Less than a month after posting, the studio had very nearly reached its goal.

With communities rallying around small business, you might be able to find or organize a similar fundraiser. Local economic development groups may be able to help with joint fundraising efforts.

This tactic can also help with managing costs and supply chain issues. In one New York town, small businesses came together to place larger orders for personal protective equipment (PPE) and office supplies, which drove costs down for all of the participants.

In the meantime, continue to conserve cash and use any new cash infusions wisely. One area that may make sense to invest: updates to safety and operations. Being able to assure your employees and customers that you’re operating safely can help boost morale and sales.

Look toward the future

As you begin to make investments and continue to progress through the stages of reopening, it’s critical to measure and track effectiveness. Continue investing in those activities that are paying off and drop those that are not generating results. This approach will help you see your customers’ and community’s needs more clearly and plan for the future while monitoring your cash flow. Evaluating the changes you’ve made to your business in real time is a good first step when it comes to creating solid financial footing for 2021 and beyond.

Sources: Federal Reserve, National Federation of Independent Business, Nextdoor, GoFundMe, AARP

The impact of COVID-19 comes in waves: Americans have gone from isolation to reconnecting and back again as the crisis continues to develop. As we rebuild, social distancing has created a challenge for business owners who rely on connections — both personal and professional — to help run their businesses.

And yet, business owners are rising to the challenge. Recent research from Wells Fargo showed the small business community banding together to help one another, and their customers, through this crisis. Let’s take a closer look at how business owners can build lasting connections that can help them rebuild and grow.

Why connections are important

When COVID-19 took root in the US, one of the most immediate and widespread ripples was the push to socially distance and stay at home.

This abrupt change to how we connect and communicate impacts small business. Businesses without websites got online to connect with customers. Face-to-face interactions moved to video calls. Water-cooler exchanges became social media messages.

Wells Fargo talked to a number of small businesses in June to better understand how COVID-19 is changing the way businesses interact with their communities. Owners reported that the trials presented by COVID-19 brought the community together, since businesses felt like they were rooting for one another.

The support doesn’t just exist among businesses. Consumers are looking to shop local and many are increasing their tips (where appropriate) to support local businesses.

Consumers are looking for new ways to help their favorite establishments. As a business owner, it’s important you meet customers halfway by giving them meaningful ways to shop or stay connected.

Finding the best method of communication is an essential first step, but you’ll need to balance the right medium with the right message to really build connections.


The case for communication


of Americans rely on a small business at least once per week


of small businesses have been affected by COVID-19


want their favorite businesses to be a reliable news source to keep them informed

Sources: SCORE, SMB Group, Edelman Trust Barometer

Connecting through a crisis

Even as the economy reopens, many customers who used to swing by your shop or office may look for new ways to connect. Finding the right digital platform for your business can make it easier for customers who want to stay in touch to do so. It also makes it easier for you to reach out to them.

The right platform for your business likely depends on your industry, but there are a few basic steps you can take to revamp (or build) a digital profile that resonates with your clients. Register your business with Google and create a Yelp page, for example. Consider creating basic social media pages on the platforms that make sense for you. And if you don’t have a website, think about creating one — it’s much easier than it used to be, and many customers expect them, especially during COVID-19. You can also enable your site to accept payment. Just be sure to test any e-commerce features on a semi-regular basis so you know what experience your customers are having.

For some, putting this much focus on your online presence can feel opposite to the human connection that typically goes into building relationships. But small business owners told Wells Fargo that moving their operations online was one of the most effective ways to evolve their community.

In today’s reality, building a digital presence that reflects who you are as a company helps create an authentic connection. It allows your network — from customers to vendors — to easily discover what you’re really about.

Keep those personal connections intact

Once you’ve built that digital presence, it’s important to make sure you communicate the right message — something that shows how much you care and accurately reflects your business.

Think about the various ways you have to talk to your community. You might write blog posts to keep your clients up to date and develop social media posts to raise your profile. Use language in your updates that reflects how you would communicate in person.

Keep in mind: Your community is more than just your customers. Your employees not only comprise your business, they also represent you. To effectively build a broad community, start by fostering internal connections. Talk to your employees about the changes you’ve had to make during COVID-19 and your plans for the future. You might choose to do this one-on-one, but you can also write an email newsletter or host a group video call.

Make sure your employees know the message you’re hoping to share with the broader community, too. If they’re sharing the same message, your reach will be that much greater.

Individual connections and exceptional service are common reasons customers stay loyal to small businesses. You can use technology, whether it’s social media or video chats, to keep and even grow those personal connections.

Keep it going

As the country reopens — a process that could stretch into 2021 — there’s a large amount of uncertainty. We aren’t sure what back-to-school will look like this fall or if there will be a vaccine, and resurgences of COVID-19 may lead to cycles of new closures and reopenings.

The good news is, the connections you’ve worked to create can help you navigate uncertainty. One major benefit of digital communication is an enhanced ability to take advantage of feedback.

Customers can post feedback on Google or Yelp, as well as social media posts. You can ask clients to tell you what they’re worried about or what they think will happen next; you might even send out more formal surveys. Customers are likely to be pleased you asked for their opinion and even more so if you use their input to better serve them. Plus, since this type of feedback happens in writing, it’s easier for you to track them and ensure updates get made.

Take advantage of employee feedback, too. With economic uncertainty ahead, employees are just as invested in your company’s success (and their continued employment) as you are. As such, they may have ideas to boost revenue or cut costs, and they can be critical in both attracting and retaining clients.

Embrace the competition

Finally, talk to other business owners. According to Wells Fargo’s research, many small business owners seek out advice from their peers. Because the crisis has fostered a sense of community among business owners, there may be a greater than normal inclination to help one another through the crisis.

This could mean sharing ideas about logistics, like the best way to quickly and effectively clean, or bigger picture initiatives, like monitoring updates to local rules and regulations. You might even band together and lobby for changes — like shutting down streets to create outdoor commercial space if people in your area are avoiding indoor crowds.

Just remember that joining together with other local businesses doesn’t mean you have to stop competing or innovating. One idea to consider: Look at similar businesses in other cities and states. If you run a law firm in Arizona, consider how law firms in Iowa or Texas are navigating the crisis. It’s possible you’ll find ideas to innovate or lessons on how to react if the COVID-19 situation changes in your area.

Small business is the backbone of the U.S. economy. They provide half of U.S. jobs and the majority of American consumers shop at a small business at least once a week. That means the community created by small business is essential to how we live and function. Business owners have an opportunity now to solidify that community in a way that benefits not just small business, but the country as a whole.

Sources: Deloitte, Edelman, Groupon, Financial Times, Google, Yelp, Small Business Administration, SCORE, SMB Group

As the summer winds down, owners across the country are taking stock of how significantly COVID-19 impacted their businesses and are planning ways to rebuild. According to studies, from Wells Fargo and outside groups, most businesses have been forced to adapt their business models to weather the crisis.

Let’s explore how businesses are adapting in general, how you can adapt your business, and ways to ensure the changes you make stay relevant through 2021 and beyond.

How businesses are adapting

COVID-19 is causing unprecedented and ongoing global disruption. In the United States alone, three in four businesses told the National Federation of Independent Businesses (NFIB) they were negatively affected.

Recent Wells Fargo research confirms that sentiment: A number of small businesses reported they had downsized or paused operations during the crisis. This resulted in cash flow issues and for some, dramatic drops in business.

As 2020 progresses, that same Wells Fargo research showed small business owners split between optimism and fear. Some said their businesses will be “prospering and adapting by maintaining sensitivity to health concerns.” Others said they’re fearful about the future, concerned about how they might be able to adapt to new regulations and social distancing.

You’ll notice the optimists link prosperity with an ability to adapt their businesses to the changing situation. That can be easier said than done, so let’s look at the “how” for a moment.

How to adapt: Find an anchor

Chances are that you have an emotional attachment to your business and its well-being. So, making changes to it could have a strong emotional component. It’s important you don’t underestimate that.

Before you make a move, review your mission statement , or the vision and goals you had when you started the business. Then, look at how you’re fulfilling that mission.

You might do this by looking at formal business documents, like your value proposition, or by thinking more generally about how you’re able to serve your customers. Use your original goal and objectives to serve as an anchor as you consider potential changes.

Then, think through how your customers have changed as a result of COVID-19. Ask yourself: Does my value proposition still make sense? If not, some aspects of your business may need to change. As you make changes, it can be helpful to see if these changes align with why you started the business (or your mission statement). Doing so can ensure that any changes you make now still make sense in 2021 and beyond.

If you notice your mission statement doesn’t hold true anymore, you may find yourself making more fundamental changes and moving more toward a reinvention.

Decide what to change

Many businesses are making much smaller changes during COVID-19. In fact, small business owners told Wells Fargo that most of the changes they’ve made have been operational — attempts to keep customers and workers safer as the crisis progresses and changes.

Some moved employees to remote work environments and implemented virtual client meetings. Others moved sales online or changed to delivery, pickup, or online services. Some began sourcing materials from local suppliers due to supply chain issues.

Consider a furniture designer who sells wholesale to stores. She had built a growing business, grounded by the core value of making well-made, well-designed furniture accessible to everyone. But as the effects of COVID-19 amplified, sales slowed at the stores she sells to. Less foot traffic and financial concerns mean more people are buying discount furniture online.

Meanwhile, the cost of wood is fluctuating significantly. The designer may have to raise prices and could face shrinking margins. Since the designer sells wholesale to stores, she’s concerned about the ongoing limitations around foot traffic.

So how can the designer stay true to her anchor — the idea of making well-made, well-designed furniture accessible to everyone — under these conditions?

Implement those changes

She might move away from the wholesale market and decide to sell direct to consumers. Next, she might look at how people are spending their time during the crisis and see social media as a big potential market and begin marketing her products on Instagram and Pinterest.

This is just one example, intended to provide inspiration, and it may not work across all industries. If you need ideas or inspiration, it’s a good idea to seek concrete advice or learn from what your competitors are doing.

For example, a hair stylist might notice that a number of salons are no longer offering shampoo services. Based on this, she may decide to do the same. By doing so, she doesn’t have to coordinate safety measures for the washing process and can use any time she saves to help sanitize between patients. This may allow her to keep volume closer to her pre-COVID levels.

True, some customers may miss the service. But the stylist could send an email to her clients asking them to come in with wet, clean hair, and explaining the rationale for the change. She can also outline her plan for bringing the service back as things return to “normal.”


Pivoting? Keep values in mind


of small business owners started their businesses to build something of their own


of consumers feel better about brands trying to make a difference during COVID-19


of small business owners think it will take 6 months or more to recover


of consumers favor purpose-driven companies

Sources: Cox Business, U.S Census, Cone Communications, Twitter

Rally the people and resources you need

If you’re trying to figure out how to adapt your business, start by thinking about where you’re running into problems. See if you can narrow down your questions or pain points, which can help you find the right people to ask for advice.

For instance, many business owners told Wells Fargo they’re interested in maximizing their forgiveness options for Paycheck Protection Program (PPP) funds. Finding a resource, like the Paycheck Protection Program Loan Forgiveness Center can help with this, and tracking your cash flow ahead of time may help you take advantage of those resources.

There are a number of other resources that offer owners guidance, both on adapting their businesses and funding them. Consider U.S. Small Business Development Centers and SCORE for counseling, mentoring, research, and resources for small businesses.

Community and regional business organizations can also help — they’re a great place to connect with other regional businesses, who can provide advice and support. For example, Indy Black Owned is a group founded by a small business owner that serves as a resource for Black-owned businesses in Indianapolis and the consumers looking to patronize them.

Trade and industry groups are also a good option. They may have online groups or forums with advice for how to adapt during COVID-19, including strategies for how to handle the ups and downs of reopening. If your industry has experienced changing safety standards, these groups can also help you stay up to date on changing regulation.

Change is worth it

While 2020 has certainly had its share of challenges, it has also uncovered the tenacity and creativity that small businesses are known for. While it’s tempting to work toward a “new normal,” it’s also important to realize we don’t know when it will arrive or what it will look like.

That’s one reason it’s so important to adapt your business in a way that’s sustainable and fits your original goal for your business. In fact, tapping into the passion that inspired you to start your business could provide you with the inspiration to not only adapt, but also rebuild and grow into the future.

Sources: Forest Data Network, MarketWatch, Indy Black Owned