Before the pandemic, the economic climate was generally positive and many businesses were showing solid growth in 2019 and expected to have more of the same or better in 2020. Dale Caldwell, executive director FDU Rothman Institute of Innovation and Entrepreneurship said there was really a lot of hope in November and December of last year, and while the political landscape was still not as favorable to small businesses as he would like, it was generally more positive than it is now.
Caldwell was one of four panelists during Monday’s NJBIZ Conversations: Startups And Early Stage Investing discussion. Moderated by NJBIZ Editor Jeffrey Kanige, Caldwell, along with Andrew Frazier, founder of SmallBusinessLikeAPro.com; Jill Johnson, chief executive officer of the Institute for Entrepreneurial Leadership; and Wendy Oliveras, founder of Shess Global Alliance LLC provided insight, tips and tools on how small businesses can cope with the pandemic.
Johnson said her focus at IFEL is to work with entrepreneurs who are dealing with limited resources. Many were struggling before the pandemic, but even more once the outbreak hit and they were faced with trying to find ways to pivot those resources and weather the storm.
Back in March and April the problem of limited resources worsened and small businesses faced a struggle to survive. Many were left with a multitude of uncertainties and they needed to re-envision their business. Johnson said that was not an easy task.
At first, many owners thought the shutdown would only last a few weeks; then maybe for three months. But as the pandemic grinds on, the problems are mounting.
Funding was one way small businesses were able to weather the economic climate. Frazier said that money from the Cares Act was a godsend for some of these small businesses and many would not have survived without it.
According to Frazier one of the best programs available – one that many businesses would not have been able to get in other circumstances – was the Economic Industry Disaster Loan (EIDL). There were also a lot of alternative products coming out – and small business owners indeed found themselves relying on the new Small Business Administration programs.
Oliveras said that many business owners were unsure of what programs they were qualified for and her company provided them with guidance on making the right connections and where to turn.
Caldwell agreed, adding that many business owners suffered because they didn’t have the affiliations with their financial institutions or access to information. He did praise Tim Sullivan and the New Jersey Economic Development Authority for its programs and funding, but said it is still not enough. He called on government officials to focus on the needs of small businesses, rather than large corporations.
Watch the full NJBIZ Conversations: Startups And Early Stage Investing discussion video here.
Asked whether it is advisable to start a business now, Caldwell was optimistic and said that there are great opportunities for innovative entrepreneurs, but not for those who need a lot of investment capital.
Johnson said there are opportunities now especially for fintech and edtech companies, with investors looking for these specific opportunities. Other businesses, such as retail or restaurants, need to figure how to reach consumers. Fundamentally, they need to do business differently, so that in case of another shutdown they are ready to pivot.
To that end, Frazier recommends businesses do three things to address the challenges they are facing, because challenge creates opportunities. He said small businesses need to look at the trends, learn what trends to take advantage of by understanding your strengths and finally have the capacity to take advantage of those things and come up with a plan to move forward in this environment.