COVID-19 Strains Small Businesses

How many times have you seen a video of an angry customer storming the cash register of a business while refusing to wear a mask? For the small-business owner in America, this has become an unfortunate reality amid the COVID-19 pandemic. However, how does the person behind the counter of a small business handle the challenges of the pandemic from a business perspective? Ranging from appeasing maskless, angry shoppers to purchasing sanitizing materials for their own employees, these business owners have navigated a challenging path. For this study, we surveyed over 200 small-business owners operating in-store or on-site to investigate the effects of a federal mask mandate, the array of concerns of businesses, and the financial toll of the COVID-19 pandemic on small businesses.

Key Takeaways

• 41% of small-business owners have had confrontations with customers over mask mandates in-store or on-site
• 66% of small-business owners want the government to enforce a mask mandate.
• 1 in 3 small businesses report getting their employees vaccinated as a top priority.
• 18% of small-business owners are being significantly strained by having to protect their workforce from the COVID-19 variants

Mask Up Before Shopping

As the delta variant rages on, the number of cities across the country requiring citizens to wear masks also continues to rise. A majority of small-business owners shared that they have implemented mask mandates on-site, and the difficulties surrounding the enforcement of mask-wearing and supplying PPE to employees and customers may be the reason why businesses feel so strained, with 61% saying the COVID-19 variants are having a negative effect on business. As if competing against online giants like Amazon isn’t difficult enough, employers are also expected to absorb the cost of an employee’s PPE, or personal protective equipment, such as gloves and face shields.

While the person behind the desk at your local town hall might decree citizens wear a mask, enforcing this notion as a business owner is a whole different ballgame. Our study found that small-business owners want to protect their employees but potentially face losing some customers over masks.

• Small-business owners report struggling to enforce mask-wearing among customers or clients. Many face confrontations from customers or clients over masks
• 38% of small-business owners feared losing customers as a result of an on-site mask mandate.

Nearly 71% of business owners expected to continue seeing COVID’s negative influence into next year. With no clear answer as to when the pandemic will run its course, small-business owners operating on-site venues are living with uncertainty.

Struggles Over Variants

When it comes to COVID-19, the vast majority of small-business owners (74%) said protecting their employees from the virus was their primary concern. And while mask-wearing and social distancing are effective tactics for reducing transmission, affording it and enforcing it are major obstacles.

With no new Paycheck Protection Program (PPP) loan on the horizon, it may be time for the government to consider how they can help small businesses weather the storm caused by COVID-19 variants. According to a majority of business owners, more government aid is needed to help cover PPE expenses. Another helpful decree? Small businesses want the government to enforce a mask mandate. Two-thirds of those surveyed believed that a federal mandate would take the heat off the business owner for their store policy requiring masks. When questioned on Twitter, Boston’s fuming business owners were not shy when expressing their disappointment, demanding that the mask mandate be put in place to ensure customers actually wear them. Additionally, over 40% said a law requiring proof of vaccination for employees would be helpful. The recent introduction of Comirnaty, the first COVID-19 vaccine to be officially approved by the FDA, may make it even easier for employers to protect their workforce.

Hitting Where It Hurts

As previously noted, the PPE required to safely run a business during a pandemic is not cheap. The list of materials can be lengthy – including masks, gloves, face shields, and goggles – in addition to cleaning supplies to effectively sanitize a building. Some companies have even gone as far to pass on the costs of these items to the customer, at times charging a “COVID-19 fee” exceeding $200. In terms of specifics, small-business owners reported spending nearly $1,200 on PPE and protective measures alone in the past year.

Making up 85% of the supplementary spending, the most commonly purchased items were sanitizers and disinfectants. Especially with brick-and-mortar stores, keeping facilities clean throughout the pandemic has been so essential that businesses commonly advertise their cleanliness in order to keep customers assured. Equipping employees in PPE served as the second-highest extra cost, with 70% noting the financial impact. Other pandemic-related expenses included thermometers (49%), social distance signage (49%), and plastic counter shields to encourage separation (32%). So how are these employers compensating for all these new costs? Unfortunately, more than half (57%) are subtracting these costs from overall profit. Similarly, many owners (44%) are whipping out their own wallet to cover these costs personally.

Ongoing Business Challenges

Across America, owners of small businesses continue to experience the ongoing effects of the pandemic. They are struggling with policing mask mandates within their stores, especially as states across the country continue to roll back any and all restrictions. Additional requirements to align with customer demands for superior levels of cleanliness also force many business owners to shell out cash from their own pockets to cover the costs. With this in mind, take the extra effort to be especially kind the next time you visit that corner coffee shop – its owner has endured significant roadblocks over the last eighteen months!

With a growing need to provide PPE and equipment to protect customers and employees against COVID-19, small businesses can turn to Clarify Capital for transparent and fast funding with flexible payment options. At Clarify Capital, we work with small businesses to level the playing field, helping business owners quickly cover the unprecedented and unexpected costs of the pandemic. From e-commerce to professional services, retail, and blue-collar business, we can help you secure the funding you need to protect your employees and customers to achieve your business goals with expert help every step of the way. Visit Clarify Capital to learn more.

Methodology and Limitations

We surveyed 520 small-business owners using Prolific to explore how COVID-19 variants are affecting small businesses, their financial security, and their customers, clients, and employees. We also wanted to explore how online or virtual small businesses may be affected differently than their brick-and-mortar counterparts. For most of our analysis we explored the experiences of 231 of small-business owners who reported operating their businesses either in-store or on-site. We focused our analysis on PPE costs and mask mandates among this group. For our financial statistics, we removed outliers from the data. Respondents surveyed ranged in age from 19 to 62 with an average age of 30. Around 44% of respondents identified as men, 54% as women, and 2% as nonbinary.

Survey data have certain limitations related to self-reporting. These limitations include telescoping, exaggeration, and selective memory. We didn’t weight our data or use statistical testing. This was a purely exploratory project that examines the strain of mask mandates on small-business owners.

Fair Use Statement

We hope that you find value in this article. As every community is home to a small business, we are confident that the insights shared here will provide awareness into the impacts of COVID-19 on American small businesses. We also welcome you to share these insights with friends, family, and workers for any noncommercial use. We only ask that you link back to this article when doing so.