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How The Coronavirus May Affect Small Business Owners

How Covid-19 could affect small businesses and how to plan

The Coronavirus outbreak has caused many entrepreneurs to wonder about their businesses in the event of unforeseen interruptions in the supply chain. We spoke with business coach Erica Douglass to get her insight on how Covid-19 could affect your company and what you can do to plan accordingly.

Have you already experienced a loss of income as a result of COVID-19? Jump to the Resources section at the bottom to find out how your state can help.

Supplies May Become Unavailable

With factories in China still closed, we're likely to feel the shortage here soon.

"Keep in mind that most packaging is made in China," said Douglass. "So even if a manufacturer has a part, they may not have the package for it. Now would be a good time to buy anything you need before June 1, especially if parts or all of it are manufactured in China."

"Having said that, it may be worthwhile to wait, if you can. We may see some good deals hit the market once China is given the OK to resume business operations."

That wait may be well into 2021, however. It will take time for production to ramp back up and fill the supply chain gaps created by the months of closures. Even then, orders from large manufacturers will likely take precedence.

Another option is to find new suppliers. While much of the world is deciding how to handle the coronavirus, few places are as shutdown as China. See if you can source supplies from the Americas, Europe, or India.

If you do find that your supply chain is impacted, be upfront with your customers. Add a banner to your homepage, put a warning on your product pages, or classify inventory as out-of-stock. It's important to be transparent with your customers.

The same goes if you're unaffected. Let them know they can still purchase the goods and services they need – especially if your supplies are a part of their home or business operations.

Sales May Drop

Business may slow as consumers cut discretionary spending to focus on essentials. Prepare to see a decline in revenue that's more significant than usual and may not bounce back right away.

In addition, be prepared for smaller-scale events (like crafts fairs and farmers markets) near you to produce lower turnouts. People are avoiding mass gatherings in an event to limit exposure and may be less interested in coming to local happenings, even if they're regulars.

You may even see more drastic measures occur for large industry conferences and tradeshows. Huge corporations like Facebook are cancelling summits and Amazon suspended non-essential employee travel. These occurrences are sure to increase.

As a result, sales, professional development, and networking may be stunted.

You May Be Quarantined

A quarantine is possible if the United States can't get the virus under control. If it happens in your city, be prepared with a plan that accounts for at least 14 days.

Contract Fulfillment

There's a policy in many rental agreements (if you're a brick-and-mortar store) called force majeure. The legal definition of force majeure is unforeseeable circumstances that prevent someone from fulfilling a contract.

"Reread your contract and see if this is something you can use to your advantage," said Douglass. "If your business is materially unable to continue for weeks or longer, you may be entitled to not pay. This could apply to rental agreements, manufacturing contracts, and more."

Employee Functions & Wages

It's a good idea to set up an emergency plan if you expect your team may be out of the office for an extended period of time. Decide if you can institute a work-from-home policy to maintain operations and minimize risk of spreading.

You may also want to draft a policy for lost wages employees won't receive while they're home. Douglass recommends having these plans in place even if they aren't mandatory in your area.

Even if you aren't quarantined, encourage employees to stay home if they're not feeling well. According to the CDC, "Employees who have symptoms of acute respiratory illness are recommended to stay home and not come to work until they are free of fever (100.4°F or greater using an oral thermometer), signs of a fever, and any other symptoms for at least 24 hours, without the use of fever-reducing or other symptom-altering medicines (e.g. cough suppressants)."


Without making light of the devastation and lives lost, there are some positive repercussions we may feel in the business world as a result of Covid-19.

If apprehension continues to grow with regards to international purchasing, it's possible we'll see a natural boost in domestic shopping. More consumers may turn to locally-sourced products and support small and local sellers.

In addition, you may notice a renewed focus on employee health and wellness. "In the past few weeks, people have become aware of how many people die from the flu annually, and that most of us are not washing our hands correctly," said Douglass. Offices have started adding more hand sanitizer stations and offering cleaning wipes for desks and equipment. It's possible this emphasis may extend to increased paid sick days, as well.

Douglass also believes that due to widespread shortages, there could be an increased awareness to the global environmental effects of high-polluting factories, low-quality products ending up in landfills, etc.


A lack of income could irrevocably hurt many local small businesses. See if your state has opened a loan program that could help.


  • The Small Business Administration has opened applications for federal disaster loan assistance. Learn more.
  • Facebook is offering small business grants for 30,000 small businesses. Find out more.
  • Honeycomb is offering crowdfunded small business relief loans for small businesses. All states with the exception of California, Texas, South Dakota, and Alabama are invited to apply. View website for details.

Alabama – Leaders in Birmingham are working to create a loan program for small businesses impacted by the virus. These zero-interest loans will be available to companies with fewer than 50 people. More details to follow.

California – Several CA cities have launched city-based initiatives. Los Angeles is offering emergency microloans between $5,000 to $20,000 to businesses that provide low-income jobs. Applications are available online. In San Francisco, businesses with 1-5 employees can apply for emergency funding (up to $10,000) to help cover rent and salaries. That application is available online as well. Sacramento business owners are eligible for up to $25,000 in loans with 0% interest. Learn more. Berkeley created a $3 million relief fund for businesses in its community who experience significant loss. Get more details.

Colorado – The state's capital started a monthly cash grant program aimed at small businesses that have lost the ability to operate. Interested organizations should fill out the interest form by March 31, 2020 to be eligible for up to $7,500. Additionally, business owners in Glenwood Springs can apply for up to $40,000 in funding through the USDA for working capital. Find out more.

Florida – The Florida Small Business Emergency Bridge Loan program opened on 3/17/2020 for companies with 2-100 employees. Small business owners can apply for short-term interest-free loans of up to $50,000 until May 8th. For more information, email or call (866) 737-7232. For businesses in Leon County, you can also apply for a grant from The Office of Economic Vitality. Between $1,500 and $5,000 is available depending on your size/number of employees. Apply online.

Illinois – A state-funded loan program is providing small business owners with loans up to $50,000. To be eligible, you must be located outside of Chicago, have experienced a 25% drop in revenue, and make less than $3 million. Apply online. For Chicago residents, a resiliency fund is available. That includes up to $50,000 in loans to organizations that have experienced a 25% drop in revenue and 50 employees or less. More details and the application can be found here.

Iowa – The state has opened a relief grant program for businesses in the state experiencing disruption due to COVID-19. If you have less than 25 employees, apply now.

Maryland – A new grant offered by The Maryland Department of Commerce aims to provide working capital to small businesses. Eligible companies (must have less than 50 employees) can receive grants up to $10,000. Get more information.

Massachusetts – Applications for Mass Growth Capital Corporation's Small Business Recovery Loan fund closed March 19, 2020.

Michigan – The state plans to launch grant and loan programs to help affected small businesses beginning in April 2020. The amounts range from $10,000 to $200,000 for organizations that can prove economic loss. Visit the Michigan Economic Development Corporation for more information.

New York – The City of New York is offering loans to businesses that have seen sales decreases of 25% or more and have less than 100 employees. Eligible companies can receive zero interest loans of up to $75,000. See details.

Oregon – Beaverton is offering small businesses rent or mortgage reimbursement up to $2,500 and Hillsboro is providing grants to businesses affected by COVID-19. For Jade District businesses, up to $190,000 is available from various local and government sources. Apply for financial assistance in Beaverton, Hillsboro, or Jade.

Texas – Austin is working to create additional support fpr its small businesses. The proposed program would provide working capital loans up to $35,000 for companies that can prove economic injury as a result of the virus. More information to follow.

Washington – Businesses in certain Seattle neighborhoods can apply for a grant from Amazon's $5 million small business relief fund. To qualify, companies must be largely reliant on foot traffic, have 50 employees or less, and generate less than $7 million in annual revenue. Apply now.

We hope you and your family stay safe, and that your business doesn't suffer during this uncertain time.

If you have any questions about the state of our production, please don't hesitate to call us at 1-888-575-2235. Our operations are not impacted by the virus and we will continue to serve you to the best of our ability.

This article is meant to be used as a small business guide, not as an authoritative resource on the latest safety protocols or legal practices. Please be sure to check government databases for updates or revisions on Covid-19 and consult a licensed legal professional before acting on any of the advice above. We are not responsible or liable for any actions taken as a result of the content or resources herein.