We have all heard it said that small businesses are the lifeblood of a local economy, contributing not only monetarily but also in well-being, character, and sense of place. So it is here in Roanoke. Imagine downtown without Alexander’s, Chocolate Paper, Texas Tavern, or Billy’s. Imagine Grandin Village without Scratch Biscuit, Local Roots, or Too Many Books. Imagine Northwest Roanoke without your favorite barber shop or Jamaican fare at Island Jerk, or the Williamson Road Corridor without Viet Sub, Northwest Hardware or La Estrella Latina.
Small businesses are where we meet one another, where entrepreneurs test new ventures, and where many secure their first job. History tells us that economic downturns are not kind to small businesses. The Great Recession saw small businesses account for 62% of job losses 2008-2009. In April, an article in Forbes cited a survey conducted by the National Bureau of Economic Research indicating a recession lasting longer than six months could see more than 40% of small businesses closed for good. With September, we have entered that six-month territory with little end in sight. The previous two posts focused on two other aspects of our local economy – arts and culture, and health care and bio-medical research. This post will focus on local business, the impact COVID-19 is having, and what is being done to try and address these disconcerting trends and projections.
The Implications
There are more than 3,300 private business establishments currently located in the City of Roanoke – nearly all of them employ fewer than 100, with more than half employing four or fewer. Of those employed in Roanoke, more than half work for a business employing 100 or fewer individuals. These businesses, their owners, and employees are heavily represented on the boards of local non-profits and cultural institutions, and in the financial contributions made to the same. Many of these establishments figure prominently in tourism campaigns, are the destinations sought out by visitors to our community, and engage local performing artists. While it is true that this segment of any local economy is the most volatile with routine business closures and turnover, it is reasonable to wonder how different Roanoke will be if 40% of these businesses are no longer in our community.
The Response
Some of the first steps taken by Congress following the initial fallout associated with COVID-19 supported small businesses. The Paycheck Protection Program provided more than $600 billion in loans to businesses with varying degrees of success, and the Emergency Injury Disaster Loan program added tens of billions more. Still, with most small businesses having little to no savings and far less business activity than normal, most saw these programs as temporary lifelines. Locally, similar loans and grants were offered through the Roanoke Economic Development Authority and Roanoke Virginia Career Works. An additional $1 million was added through the City’s share of the CARES Act and yet another $450,000 through a special allocation of HUD CDBG funds, which were dedicated to small businesses operated by low-income owners.
These governmental efforts have been joined by marketing campaigns launched by Downtown Roanoke Inc. and the Williamson Road Area Business Association, and a variety of “buy local” initiatives focused primarily on local restaurants. Perhaps most significantly, all of these efforts have been matched by an incredible burst of innovation by the businesses themselves, which overnight had to figure out how to offer online sales, curbside pick-up, outdoor dining, and a number of other actions taken to provide customers a safe way to continue to patronize their businesses. Though these efforts, combined with the governmental lifelines, have helped keep the doors open, with limited financial resiliency and the likely need to invest even more to sustain even the current level of business activities, many small businesses will continue to struggle more so than larger, well-capitalized businesses.
How We Can Help
What is perhaps most needed is ongoing support of these businesses: customers. As our local small businesses continue to innovate and safely re-open, it is important that each of us to return to these places to buy their products and services. Their viability is very much in our hands! So much of what we enjoy about Roanoke and what makes our community unique, each of our neighborhoods vibrant, is related to small businesses. While not all will make it through the impact of the Coronavirus, our support and patronage will help many of these businesses survive what no doubt is the greatest challenge any of them have ever faced. So let’s safely get out and shop and eat, locally!
-- Bob Cowell