PROVIDENCE – For small businesses to overcome pandemic-related challenges, policymakers must prioritize programs that facilitate competitive pay and benefits, training opportunities and provide clear guidance on how business owners can access these benefits, according to a new set of recommendations.
Based on survey responses from businesses around the country, the Goldman Sachs 10,000 Small Businesses Voices program, in partnership with the Bipartisan Policy Center, highlighted four key hardships for small businesses: hiring and retention; accessing capital; child care; and procurement and government contracting.
Rhode Island small businesses reflect these national issues, according to Lauren Anstey, policy director of Goldman Sachs 10,000 Small Businesses Voices.
“Rhode Island small-business owners have had to constantly adapt their operations throughout the pandemic,” Anstey said. “It’s critical that Washington step up and ensure that small-business owners have the tools and resources they need to succeed.”
Nearly all small businesses participating in the program, or 97%, reported that hiring difficulties are impacting their bottom line, up 17 percentage points from September.
Additionally, 75% of small-business owners who reported retention issues said that they cannot afford to provide competitive salaries, while 67% said they can’t keep up with competitive benefits.
Julia Smith, owner and director of Paper Crown Preschool in East Greenwich and a member of the 10,000 Small Businesses fall 2021 cohort, has come up against these issues while running her private preschool.
To operate the school while avoiding high turnover, Smith said she has needed to forego hiring administrative and assistant positions, instead filling these roles herself.
In turn, child care becomes more difficult for parents to access.
“In order to retain quality staff, you have to be able to pay them well and offer them insurance and retirement,” Smith said. “It’s hard for us to be able to do that and offer our families affordable child care.”
Survey respondents also show that some government programs, such as the Families First Coronavirus Response Act, are “overly burdensome and complex” for small businesses – in 2020, only 4% of employers claimed this benefit. Another program, the Employee Retention Credit, reached just 3% of employers.
Smith, who launched the preschool just weeks before the initial COVID-19 lockdown went into place, experienced similar issues.
“I was a little surprised that there were quite a few [types of] assistance that we didn’t qualify for,” Smith said. “Even though we were new – at that point we were licensed as a child care facility – we did prove that we had enrollment, enrollment was growing and there was a need for what we were doing in the area.”
While Smith eventually connected with the U.S. Small Business Administration for support, she hopes the process can be easier for businesses going forward.
“Being a new businesses owner, it was disheartening to feel like, in a state that is trying to build up its economy, we didn’t really have a ton of support, or at least education that was available to us without having to really dig,” she said.
The report also highlights heightened difficulties for minority-owned businesses: Black small-business owners were more likely to use their personal savings to support themselves during the pandemic, in one example.
And while nearly half of Black-owned small businesses expected they would need to take out a loan or line of credit in 2022, only 19% were confident they could access capital.
By comparison, 33% of small businesses overall expected they would need a loan or credit line this year, and 31% of those who needed the capital expected they would be able to access it.
To address challenges faced by minority-owned businesses, the report proposes measures such as renewing the expired COVID-19 Economic Injury Disaster Loan program, adding to federal technical assistance and training programs, and extending the Community Advantage Program for Black and Hispanic small-business owners.
Jacquelyn Voghel is a PBN staff writer. You may reach her at Voghel@PBN.com.
