Giving Compass' Take:

• Authors at RAND spoke with 21 small business owners to better understand the landscape of challenges and potential pathways toward recovery. 

• How are you helping your local small businesses in economic recovery and building resilience? 

• Read more about small businesses during COVID-19. 


For the restaurant owner, the shift to takeout was successful at first, but the kitchen was small, the kitchen staff was crowded together, and they all faced the risk of getting sick. So the owner closed.

For the game store owner, traffic and gatherings stopped, but there was a solution—pair with a restaurant to provide takeout meals and games for family “game nights.” And just make enough money to hold on for a little while longer.

The novel coronavirus pandemic has hammered small businesses around the country. We spoke with 21 small business owners, the restaurant owner and the game store owner among them, to learn more about the challenges they are facing and how they might best be helped. We focused on the businesses that make up the daily streetscape of Americans' lives—the restaurants, specialty shops, and local establishments that make communities a bit different, a bit special.

They told us their biggest immediate concern is fixed operating costs, those expenses that do not go away when a business is shuttered. To reopen successfully, they said they could be helped by access to working capital though loans, clear communication from government, guidance on worker safety, and coordinated reopening rules across jurisdictions.

There are already a variety of assistance programs, and many of the owners we talked to had tapped them. The premier program is the federal Paycheck Protection Program (PPP), which must be used mostly for salaries. The PPP has been helpful, but insufficient.

The most pressing near-term problem is the challenge of meeting fixed operating costs—rent, mortgage payments, utilities, and insurance. Even with payroll assistance, as long as sales have collapsed, businesses are finding it difficult to pay those recurring costs. Rent poses a particular problem because landlords also have to meet their mortgage obligations and could have difficulty deferring rent. However, if tenants go bankrupt and the economic recovery is prolonged, landlords will then have difficulty renting out space and thus also might face financial difficulties or bankruptcy.

Read the full article about small businesses by Diana Gehlhaus, C. Richard Neu, and Howard J. Shatz at RAND Corporation.