Vaccines for COVID-19 recently began being distributed and administered. The Wall Street Journal states it will take until sometime in March to vaccinate the first 100 million individuals with the highest priority of getting the vaccine. That would leave well over 200 million Americans still in need of the vaccine as we head into spring.
The stock market is doing very well — an unbelievable achievement never seen before — even though millions of people have lost their jobs. The stock market is based on the theory of expectation, and what it is telling us is that with vaccines, the economy will begin to turn around and will be much better going forward.
But let’s look at this through the eyes of small businesses. Outside of government, companies with less than $7 million in sales and fewer than 500 employees are widely considered small businesses by the U.S. Small Business Administration. And the expectation for small businesses to return to what we considered normal pre-pandemic is not going happen anytime soon.
Here’s why. Multiple states have banned indoor dining at what remaining restaurants are still open. As of Dec. 1, nearly 17 percent of U.S. restaurants were “closed permanently or long-term,” according to a study by the National Restaurant Association. That percentage amounts to more than 110,000 service-industry businesses across the country.
As of the end of September, the number of businesses that had closed totaled about 170,000. And since that time, the total has possibly exceeded 200,000; it’s hard to determine how many people have been affected. In November, the U.S. had 10.7 million unemployed persons [almost 5 million more than in February, before the pandemic.] However, this number only tracks the number of people who are unemployed. It doesn’t record the people who are not drawing unemployment benefits and are out of work. So, in reality the number is higher than the 10.7 million.
With businesses closing and laying people off, no jobs for people to replace what they lost, and no income for the owners of the businesses, vaccines or not, we won’t have enough people working to turn the economy around. It will take most of 2021 to [widely distribute the vaccines to all the people who want them], but many of the unemployed still will have no jobs to go to after they get vaccinated.
The economists tell us there will be a surge in business once vaccines have been administered to the public, but the numbers tell us differently. And here is the biggest kicker of all that many economists have not figured into the equation — people’s habits have changed over the past year.
People are not buying as many clothes as they used to because they have nowhere to go. There is little dining, virtually no entertainment, and no gatherings, so there is no need to buy new clothes. Fuel sales are down because people are not commuting to work like they used to do. Any business or venue that needs a gathering of people to remain in business is either closed or ignored due to government restrictions.
It’s obvious that small businesses are not going to return to pre-pandemic levels with so many businesses closed in such a short time period. We are looking at 2022 at the earliest before the idea of normalcy begins to occur. And when the economy does begin to turn around, some of our favorite businesses we used to visit will be gone. Businesses cannot survive as long as the states keep changing the rules, which creates volatility in the marketplace. Entrepreneurs and investors seek opportunities but shun regulation and volatility, which can disrupt the flow of business. We eventually will see a surge in small businesses opening, but until then, small businesses are on a declining slope.
Terry Monroe (www.terrymonroe.com) is founder and president of American Business Brokers & Advisors (ABBA) and author of “Hidden Wealth: The Secret to Getting Top Dollar for Your Business” with ForbesBooks. Monroe has been in the business of establishing, operating, and selling businesses for more than 35 years.