Delivering a purchase

How COVID-19 has changed small business

Friday, April 29, 2022

COVID-19 affected everything from healthcare to education, and restaurants and retail shops are no exception. Check out our COVID-19 small business resources to help you navigate ongoing changes and promote recovery.

Before COVID-19, most small business contingency plans didn’t include a what-to-do-in-a-global-pandemic line item. Restaurateurs, retailers and other small businesses alike were forced to pivot—and quickly. If you’re still in business at this point, you did just that. You created makeshift patios, kicked off online ordering, took your stores curbside and live-streamed stockroom fashion shows. You should be proud of yourself.

Navigating everchanging CDC guidelines, staffing challenges and a messy supply chain have likely thrown a wrench in any business growth plan you’ve had since 2020. Things have been far from easy, but it’s inspiring to see how your hard work and hustle have carried you through two years of disruptions and uncertainty.

Though a lot has changed on Main Street, your resilience and innovation have created new opportunities to drive revenue and build relationships within your community.

Still, there’s work to be done.

Read along as we capture some insights from small businesses with success stories, the state of Main Street today, ideas for next steps in recovery, plus how you can future-proof your business so you’re ready for whatever comes next.

  • The impact of Covid-19 on small businesses

  • How small businesses adapted during the Covid-19 pandemic

  • Current Covid-19 challenges keep small businesses on their toes

  • Small business owners are optimistic about 2022

  • Steps small business owners can take to continue navigating the pandemic

  • How small businesses can prepare for 2022 and beyond

The impact of Covid-19 on small businesses

We don’t have to tell you what it was like…you were there. But let’s look at some big picture numbers for small businesses across the country.

One study in 2020 showed the number of active business owners plunged by more than three million from February 2020 to April 2020 — the largest drop on record. Overall, retail trade, restaurants and leisure and accommodation industries were some of the hardest hit.

Research from the U.S. Small Business Administration Office of Advocacy indicated, though, that “food services and drinking places recovered more quickly than other leisure and hospitality subsectors.”

The same report shows the most severe decline in self-employment was in the Northeast while the least severe effect occurred in the Midwest.

According to the United States Census Bureau, small businesses in Alaska, Hawaii, Massachusetts, New York and West Virginia, have been affected more than small businesses in Maine, Mississippi, Montana and South Dakota at the end of February of 2022.

Map of the USA

How small businesses adapted during the Covid-19 pandemic

As Covid-19 guidelines and social distancing recommendations were introduced, modified, retracted and reinstated over and over, small business owners really learned how to roll with the punches.

Between providing contactless delivery, installing Plexiglass barriers, updating technology processes and re-training staff to support ongoing changes, most small businesses had a lot on their plates.

Some even adopted new revenue streams, like distilleries that produced hand sanitizer when it was in short supply, and many restaurants created new outdoor spaces under guidance from the Centers for Disease Control (CDC).

Across the country, inspirational success stories surfaced of avant-garde adjustments and of on-the-fly changes that worked. Heartland customers are no exception.

Package to go

Take Condado Tacos in Columbus, Ohio for example. They closed their dining room in mid-March 2020 and immediately began offering limited-contact express pick-up and at-home delivery. They continued to pivot with new menu offerings like margarita kits and build-your-own boxes with tacos and dips.

Condado Tacos also showed up for its community by donating meals to staff at local hospitals and sharing video recipes for its Instagram fans. The popular taco shop re-opened two months later for patio service, outlining its plans to perform wellness checks, fog the space with food-space disinfectant and sanitize the tables and chairs after each use.

Commonplace photo

In Oklahoma City, Commonplace Books offered curbside service and at-home delivery — with handwritten notes of thanks — to serve its customers while it was closed in April and May of 2020, plus it offered various discounts and virtual discussions to keep its patrons engaged.

Today, retailers and restaurateurs alike are trying to balance their pre-pandemic progress and success while keeping up with continuous changes to the small business landscape.

Current Covid-19 challenges keep small businesses on their toes

Don’t stop now. You may have felt relief or renewed optimism when the Covid-19 vaccine was approved, but new virus variants have created new problems to solve. Even with grant programs, tax credits and record-breaking sales, many small businesses in the US are still facing big challenges and struggling to meet demand.

Whereas modifying operations, implementing changes as soon as new protocols were introduced and procuring hand sanitizer were the main challenges at the onset of the pandemic, inflation, supply issues, and employee shortages are ongoing challenges for small business owners today:

34% said generating profit was a leading challenge in late 2021
71% said rise in cases negatively affected revenue in early 2022

Profit yielding

One survey from the US Chamber of Commerce and MetLife Small Business Index showed 34% of small business owners said generating profit was a leading challenge during the third quarter of 2021. Another survey from Goldman Sachs showed 71% of small business owners in the US said the recent rise in Covid-19 cases in early 2022 have negatively affected their revenue.

76% said inflation has impacted financial health in the last six months
7.9% current annual inflation rate

Record inflation rates

The same survey said 76% of respondents felt the financial health of their businesses has been impacted by inflation over the last six months. The US Department of Labor said the annual inflation rate for the United States is 7.9% — the highest since 1982 — and is affecting small businesses and consumers alike.

69% said supply chain issues affected their bottom line

Supply chain disruptions

Additionally, the Goldman Sachs survey showed 69% of those polled said supply chain issues have affected their bottom line. Delays in manufacturing and shipping as well as shortages for various supplies and materials have made it difficult for some small businesses to keep their shelves stocked, and often when something is available its price is higher than usual because of increased demand.

Labor shortage in hospitality, retail, health services, goods manufacturing
Labor surplus in construction, mining, and transportation

Employee retention and morale

Small businesses are competing with one another for talent, and many are having trouble recruiting and hiring enough employees to fill open positions. Being unable to recruit qualified applicants is impacting bottom lines. Though there is a labor surplus among the construction, mining and transportation industries, several industries — including leisure and hospitality, wholesale and retail trade, health services and durable goods manufacturing — have experienced the highest quit rates since the pandemic began.

In response to rising inflation rates and supply chain delays, some business owners have had to decrease hours, raise prices or borrow capital to help keep their businesses afloat.

Small business owners are optimistic about 2022

Despite the potential roadblocks and challenges ahead, some reports show a strong majority of small business owners are “optimistic about the future” of their companies.

The same innovative mindset that spurred entrepreneurs like you to open your doors initially has carried them through unimaginable setbacks. Over the last two years, you have proven you have what it takes—and, seemingly, you have inspired others to join the ranks.

Though the active number of business owners plummeted in 2020, the United States Census Bureau stated a staggering 5.4 million new business applications were filed in 2021.

Registering on the computer

Steps small business owners can take to continue navigating the pandemic

That’s not the only good news. There are several things you can do to build momentum as your business continues adapting to the new normal:

Utilize available resources and relationships

Talking through important financial decisions and new ideas to try with trusted partners like your banker and attorney can keep your business on the right track.

Keep an eye on the competition

Like-minded businesses in your industry can inspire and motivate you, and may show you gaps you and your business can fill.

Take care of your team

Employee management solutions can help lighten your workload so you can focus more on your personnel. Building community and providing helpful resources are two ways to demonstrate your appreciation for your staff; having open dialogue and continuing diligent cleaning measures are other ways to show your employees how valued they are.

Create incentives that boost employee morale

Offer competitive pay and flexible work arrangements, start an employee recognition program and ensure staff have access to appropriate training and development opportunities. A happier work environment can make all the difference.

As a small business owner, you’re used to thinking on your feet. After all, mental agility and calculated risk-taking is part of entrepreneurship.

But the Covid-19 pandemic has required a new level of resourcefulness and luck, so take a moment to pat yourself on the back and celebrate all you and your staff have accomplished over the last two years. And look to the future.

How small business owners can prepare for 2022 and beyond

You know by now that even the best-laid plans can veer off course. Though additional nationwide lockdowns and restrictions are unlikely at this stage of the pandemic, your business may experience hiccups related to Covid-19 in the coming years. It’s important to anticipate potential resolutions so you can tackle whatever comes next. Fortunately, there are many solutions and products available that can help.

While many consumers prefer to shop online, many businesses will experience an increase in foot traffic. Take time to diversify your payment options, but make sure your ecommerce offerings are mobile-friendly (that includes the ability to accept digital payments) for those who prefer online shopping. Alternative pick-up options will continue to be big, so it’s important to have touchless payment choices for your customers, as well.

Planning photo

Solutions that let you integrate delivery services, forecast labor costs, track peak business hours and engage with guests through skip-the-line ordering and loyalty programs can be a game-changer for your restaurant, as well, especially during the pandemic era.

Additionally, your business may benefit from payroll solutions that can attract and recruit talent, while a custom-built HR solution can tackle everything from benefits training to compliance changes, allowing you to focus on other aspects of your small business.

While you’re shopping for payroll and HR solutions, consider how these seven must-have features can improve your operations. Our blog is a great tool for small business owners, too.

The pandemic has taught small businesses owners to expect the unexpected, but we’re here to help you feel more confident in business decisions big and small.

Covid-19 may have changed small business, but your vision, grit, and unwavering entrepreneurial spirit have helped propel your business forward despite the circumstances.

Interested in learning more? See what Heartland Restaurant or Heartland Retail can do for you.

Heartland is the point of sale, payments and payroll solution of choice for entrepreneurs that need human-centered technology to sell more, keep customers coming back and spend less time in the back office. Nearly 1,000,000 businesses trust us to guide them through market changes and technology challenges, so they can stay competitive and focus on building remarkable businesses instead of managing the daily grind. Learn more at