It’s something of a trick question to say that small business’ primary challenges are not COVID-related in the new year. After all, nearly everything concerning small business has in some way been affected by COVID, from staffing to inflation to consumer shopping preferences.
But as for those issues directly attributable to the pandemic — such as mask mandates, remote work and potential business interruption due to another shutdown — most experts say such concerns rank fairly low in 2022.
“It is interesting to me that the pandemic and COVID itself, for quite some time, have no longer been the primary conversation center. It’s really around those other issues that COVID has impacted that’s impacted [business owners’] ability to continue to operate successfully,” said Jay Chesshir, president and CEO of the Little Rock Regional Chamber of Commerce. “What we’ve heard throughout especially the last six months is, business owners are effectively finding ways to adapt.
Jay Chesshir
“Because there have been several waves — whether it’s the new variant, whether it’s a new surge, whether it’s trying to grapple with this when it first began — I think what small business has done is become extremely successful in adapting to the situation at that moment in time. I think the unique adaptability of small businesses has truly shown, especially the last six to seven months.”
In publication after publication, business watchers concur with Chesshir’s assessment that Main Street is not fearing as many direct health threats and regulatory uncertainties from COVID itself this year, as in the previous two. Instead, Main Street businesses are dealing with other issues — some of which, admittedly, brought on or complicated by the pandemic — such as the economy or supply chain.
“Far and above, I think, the single greatest issue is the inability to find employees,” said Jeff Standridge, managing director of The Conductor, an entrepreneurial support organization in Conway. “We see a headline that unemployment dropped to 3.9 percent or whatever the number is, and hey, that’s fantastic. But what they don’t do a good job of reporting is the fact that thousands are no longer in the workforce, which erroneously drives the unemployment rate down.”
Jeff Standridge and The Conductor are working to entice people back to work.
The U.S. Department of Labor reported last year 4.3 million Americans quit their jobs in August alone. By October, analytics firm Visier predicted as many as one in four Americans would have quit their jobs during 2021. And while knee-jerk analysis assumes the trend to be led by impudent Millennials, accurate on a purely per-head basis, Visier noted employees aged 30 to 35, 40 to 45 and 45 to 50 each increased their resignation rates by more than 38 percent last year.
This means while the overall number of older workers quitting is fewer than their younger counterparts, the level of experience lost by those who did leave is way up. Employee resignations in 2021 among those with five to 10 years of tenure jumped 57 percent and those with 10 to 15 years’ experience was up 55 percent, year over year.
Standridge said several factors are contributing to this dearth of people and experience in the workforce, relatively few of them having anything to do with fears of the virus.
“What I’ve heard pretty much ad nauseam as an ongoing concern for small business owners is, ‘How do we find employees?’” Standridge said. “You’ve got this kind of collision, if you will, of the Great Resignation where people are choosing to just do things differently than they had been. They’re choosing to prioritize quality of life and quality of place over and above their salary and where they work. So, they’re making different career decisions, number one.
“Number two, you’ve got stimulus money still circulating around in the system that is, quite frankly, compensating people for staying home versus going to work. That creates an issue.”
Caleb Talley
A third exit route draining workers from traditional 9-to-5s has been entrepreneurship, something Standridge called, “the new American Dream,” supplanting home ownership. Caleb Talley, executive director with Startup Junkie Foundation in Fayetteville, agreed, saying the pandemic has done nothing to cool enthusiasm for becoming one’s own boss.
“We have seen, over the last two years, no downward tick in activity as far as people coming in looking for consulting, looking for access to resources and things of that nature,” he said. “As a matter of fact, I would say we probably had more people early on in the pandemic who came through.
“Startup Junkie was like a small-business startup ER for a period of time, running around doing triage and trying to figure out what we could do in the moment to help as many people as possible. Things have calmed down a great deal from that, of course, but there’s really been no downward tick in activity.”
Many are re-entering the workforce as entrepreneurs, thanks to business plan competitions (above) and workshops from organizations like Startup Junkie.
Talley said one pronounced difference between COVID and other national crises as far as impacting entrepreneurs has been a detectable shift in mindset over risk tolerance.
“I think it’s interesting to see there’s actually a significant uptick in new business applications in 2020 and 2021, specifically in Arkansas. You look at the chart of new business applications, it’s almost like a hockey stick,” he said. “There’s some speculation that when people typically leave to go work for bigger businesses, it’s because those companies have the ability to pay more and provide security. But what we’ve seen with COVID is, regardless of whether you work for a startup or a large enterprise, there’s no such thing as security.
“Because of that, people are realizing they can take their destiny into their own hands and pursue their own thing. I think that’s one reason why people are looking to start their own business and get into entrepreneurship, now more than ever.”
As more entrepreneurial ventures launch, it places additional pressure on those businesses to meet the expectations of the buying public, be it curbside service, internet ordering or delivery. Chesshir said business support groups such as chambers of commerce, incubators and other resources have a key role to play to help these businesses compete, particularly in underserved areas where such economic activity is sorely needed.
The ‘great migration’ to Northwest Arkansas is bringing more potential entrepreneurs like the ones who filled a recent Startup Junkie session.
“These last two years has proven again something we already knew, and that is we have to be able to focus on those people who are trying to create those new types of businesses, especially lifestyle businesses, and provide resources and support,” he said. “In many cases, those folks don’t even know where to start. They don’t even know who to ask. The better we can create programming, whether it’s through the Venture Center, whether it’s through small business administration activities, whether it’s through mentorship opportunities, whatever those may be, we have to do a better job of communicating that [resources] are available and accessible.”
Talley said the same can be said for municipalities, even where things appear to be thriving on the surface. That challenge is rammed home in Northwest Arkansas, where an estimated 30 to 40 people a day continue to move in, many of them working remotely for out-of-state companies and all putting additional strain on infrastructure and services, including small business needs.
“The problems of the great migration to Northwest Arkansas, I guess you could say, are good problems to have, but definitely something that anybody in any level of leadership here has to pay attention to,” he said. “The housing market is difficult because of that [growth]. You have to have an infrastructure that can handle the population influx. Fayetteville passed a bond in 2019, but throw the inflation factor in there and those infrastructure projects will cost more in 2022 than expected in 2019.
“I’m on the side of the fence where I don’t like it when people say, ‘Fayetteville’s the next Austin, Texas.’ I want Fayetteville to be something new and great. As we grow rapidly, city and county leadership across the region have to be super-mindful about where we’re going with that growth, preparing for it well ahead of time and laying down the right foundation so we’re not the next Austin, but rather the next Fayetteville.”
