Immediate impact on small businesses; layoffs and wage cuts loom elsewhere

The negative effects of the global coronavirus pandemic on businesses in Flint and Genesee County is clear and will be more pronounced with the latest executive order by Gov. Whitmer to temporarily suspend in-person operations for the next three weeks with ‘Stay Home, Stay Safe’. Nearly two-thirds of local businesses are already experiencing quantifiable impacts to their operations, according to the findings of a recent survey by the Flint & Genesee Chamber of Commerce.

Some businesses reported sales declines of 30-50 percent since the public health crisis erupted in Michigan in mid-March.

In response, the Flint & Genesee Chamber has stepped up efforts to support the local business community while serving as an information clearinghouse for the latest developments during this unprecedented shock to the economy. This work includes:

• A Marketplace exchange where businesses can post services they need for other businesses and community members to view and help find solutions.
• Administering the Michigan Small Business Relief Program – small grants available to companies that have been negatively affected by the executive orders to close their business.
• Connecting companies to the SBA Economic Injury Disaster Loan – ensuring they understand the program, benefits, and process.  Connecting them to the resources they need to complete the applications.
• Documenting and connecting companies with new procurement needs via Pure Michigan Business Connect or the Procurement Technical Assistance Center (g. finding manufacturers that can pivot their work to make more personal protective equipment or medical devices).
• Researching and connecting companies to the right Unemployment information, via GST MichiganWorks! or the Department of Labor and Economic Opportunity.
• Hosting video webinars on different topics related to the crisis in place of the usual in-person business workshops the Chamber conducts.
• Added an online Coronavirus Toolkit to the Chamber’s website that provides up-to-date resources for employers and businesses, and a page called Support Your Flint & Genesee Businesses, a hub that showcases the different business responses to the public health crisis.

“It’s clear from the data that the situation was deeply troubling a week ago. I’m certain conditions are continuing to decline for many of our businesses,” said Chamber CEO Tim Herman. “We want all of our business members to know that we are here for them. Our team is working to support them in every way that we can by tapping our resources, addressing challenges in new and different ways and staying attuned to the rapidly-changing COVID 19 environment.”

On March 16, the Chamber launched an online Business Impact Survey to gather intelligence on how local businesses are being affected by the public health crisis. Within 24 hours of issuing the survey, 135 businesses had responded. (There was a total of 140 responses representing 135 organizations; more the one person responded from the same organization, as of March 20).

The top respondents were restaurants (18%), nonprofits (11%), manufacturers (10%), consulting firms (10%) and retail (10%)

The information is being used to help inform how best the Chamber can leverage its resources and partnerships to support struggling businesses with information, programming and advocacy efforts at the local, state and federal levels, said Herman.

The top concerns were health of their businesses (bills, finances, payroll, cashflow and revenue); employee health and security; and personal/family health security.

On the business front, 60 percent of the respondents reported being able to quantify impacts to their businesses. Restaurants have experienced loss of business immediately. Some are cutting staff hours to continue paying all their employees, while others have had to lay off workers. Consulting practices have experienced contract cancellations and have had to postpone sessions with clients.

Of the businesses able to quantify the impact, many listed various examples:

• 30-50 percent decline in sales revenue
• Staff layoffs, or workforce is working remotely
• Closures
• Approximately 20 percent say it is too early to quantify

Nearly all businesses have made adjustments in the past week to reduce their contact with the public. Restaurants have closed their dining rooms and shifted to drive-thru, take out and delivery operations. Office occupations have shifted their operations to online platforms and are opting to work from home. Most manufacturers have not made changes outside of increasing cleaning schedules and distancing workers.

• 24 percent report their staff are working remotely
• 24 percent indicated that there has been no change yet
• 10 percent are shifting to online sales/services
• 10 percent are taking steps to reduce direct contact with customers
• Other examples include changing hours, layoffs, temporary closures, changes in service delivery or changing production.

In addition, most businesses have adjusted their business model/service delivery to comply with state mandates related to slowing the pandemic while others are looking to other government agencies, such as the Centers for Disease Control and Prevention (CDC).

• Approximately half (45 percent) of respondents are looking to their local community and local organizations for information
• 36 percent are looking to government entities
• 17 percent specifically cited the CDC as a factor in their decision-making.

On the question of “how will your employees be affected”, the survey found:

• 26 percent reported that wages and employee income will be negatively impacted. This is primarily experienced by businesses in the restaurant, retail and hospitality industries.
• 24 percent reported that nothing will change for their workers, mainly consulting firms who are losing future revenue and non-profits who serve at-risk and effected populations.
• 22 percent reported laying off employees, and this is made up almost entirely by restaurants.
• 19 percent indicated the impact on their employees also included childcare, reduction in hours, staff working remotely, and duties revised

The survey also registered strong interest among the respondents in lending their services in some way to help the community during this challenging period.

Asked if there was anything the businesses could do to support the community (such meal distribution or other basic needs; discounts to fellow members for marketing/technology; gift cards for displaced workers; sanitary or health supplies; etc.), more than 50 percent answered “yes” compared to 15.6 percent who answered “no”.

“Despite the current uncertainty and hardships, with more on the horizon, it is very encouraging that our business community remains not only empathetic but ready to assist their neighbors, as we work through this crisis,” Herman said.

Note: Chamber staff continue to work remotely while the office is closed until further notice. We are available to our members and other stakeholders through normal communications such as email and phone.

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