The economic recession has been a business death trap. Small companies with fewer than 500 staff accounts for almost half of American employed workforce and close to a third of GDP, and despite the recession they are still facing an existential crisis. A recent article in Forbes Magazine pointed out that the number of small businesses on the decline is greater than the total number of cars being added to the fleet every year. If this trend continues, there will be a significant future financial loss for small business owners everywhere. It is time to start considering business news and finance as an integral part of your small business planning, rather than as an afterthought.
The economic crisis is being felt by small businesses everywhere, but especially in America where many of these enterprises were started or continue to be founded as home-based businesses. The small business is arguably the largest single segment of our economy. More than five thousand eight hundred million people are employed in some sort of a small business. These small businesses employ two million people directly, as well as over one million indirectly, through their indirect network of family and friends. While the number of working women has been falling steadily for the past fifteen years, the number of working women running home based businesses has been growing at about three times the rate of any other group of employees.
The small business is particularly vulnerable in the current global financial crisis. Home based business owners have already been forced to downsize and eliminate some jobs in response to this latest round of downsizing. For these home based business owners, the immediate danger is not only reducing potential customers; it is also reducing employment opportunities. Without the necessary workforce to run their businesses, these small businesses will not be able to remain open in case of an actual pandemic. If the pandemic turns out to be the flu, many of these owners will not be able to return to work. This is a very real threat facing the domestic economy from a currently unknown yet rapidly increasing risk factor.
The smaller businesses have an additional risk specific to them that is unique to any business. Unlike large corporations, the small businesses are not subject to bankruptcy laws that are designed to keep corporations in business. Small businesses have lower assets and revenues than large corporations and therefore are subject to much more flexible lending conditions. This means that the current crisis is likely to continue to affect the economy for years to come, perhaps even creating more of a problem than the original recession.
The small businesses that have closed in the face of this new threat are suffering a devastating blow to their organizational capability. Many of these businesses are losing customers and are struggling to find enough employees to make payroll. The majority of home based businesses are also business or home based, which means that the majority of their clientele may already be aware that they are out of business. They may be too shy to contact their local bank to enquire about a loan until there is an “official” closing date.
As the crisis continues to worsen, both businesses and consumers are becoming more concerned about the safety of their family members. The threat of a pandemic, especially a biological pandemic, has been mentioned more than once in this current article. Although the chances of a biological attack are not as high as they once were, the threat of an attack remains highly possible. The ease with which a bio-hazard can enter any household is worrisome.
A pandemic is a very real threat. There have been several outbreaks in the past, and each one was much larger than the next. One thing that all previous pandemic outbreaks have in common is that the symptoms did not quickly appear. Once the disease had entered the community, it was difficult if not impossible to keep everyone safe from its effects. As the business owners who have lost their businesses continue reading this article, they realize that the time to act is now.
To avoid a crisis situation, small businesses must be prepared in every way. This means that the top priority on their list must be to secure adequate emergency supplies. No business can operate while they lack the necessary items that will provide the basic care to their employees. In order to ensure that the supplies that they do have are fresh and on hand, the owners of small businesses should always follow the news. Newspapers, radio stations, and television news shows will always feature a special report or story about a biohazard or other crisis. By reading these reports and keeping the newspapers and television stations on their advertising lists, small businesses will always be able to stay ahead of the latest news.