Small-Business Industries Hurt Most by the Pandemic

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Laurie A. Smith / Shutterstock.com

It’s no secret that COVID-19 has drastically changed the environment for small businesses in the U.S.

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Statistics-wise, it was already a dog-eat-dog world for small businesses; with about half of them closing in their first five years. But the arrival of the pandemic squashed the hopes of many to survive for even a single year — with 84% of small businesses reporting being impacted, and 43% reporting a “significant to severe impact,” according to a survey by CBIZ.

While funding from federal stimulus and concerned locals helped keep some of these businesses aloft, others were not so lucky. Here’s a look at the industries impacted most by the pandemic.

Last updated: June 21, 2021

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Arts, Entertainment and Recreation

Museums, galleries, movie theaters and theme parks were all forced to shutter their doors with the stay-at-home orders issued in March 2020. Considering big-name companies like AMC have struggled to survive this period, the impact on smaller businesses without the same cushion has been catastrophic. According to the San Diego Association of Governments (SANDAG), over 70% of arts, entertainment and recreation businesses surveyed reported a large negative effect due to COVID-19.

Although the vaccine rollouts are pushing city and state economies to reopen these venues, it will be too late for many of them.

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Accommodation and Food Services

This sector includes establishments such as restaurants, food trucks, hotels, inns and even Airbnbs. According to the SANDAG survey, over 70% of small-business owners in this sector reported a large negative effect, and 62% believed it would take more than six months to recover.

According to Fortune, more than 110,000 restaurants and bars were forced to permanently close in 2020.

Read More: Small-Business Ideas for a Post-Pandemic World

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Transportation and Warehousing

Transportation business models include taxis, car rentals, bike rentals, limousines, shuttles and shipping services. Meanwhile, warehousing accounts for the storage of certain goods (which are usually then transported elsewhere). This sector was slammed by the pandemic, with nearly 55% of business owners reporting a large negative effect, per SANDAG.

With how heavily Americans leaned on this industry for receiving essential items throughout the pandemic, it’s unfortunate that so many small businesses have struggled; as prices on goods have increased drastically and travel is only just picking up again.

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Like the travel industry, the tourism industry ground to a halt as countries closed their borders and people were told to stay in their homes. And while this was survivable for big companies like Disney, many small travel agencies and businesses in tourist towns were unable to pull through.

Globally, tourism supports 1 in 10 jobs; and COVID-19 disproportionately affected both the economies and indigenous peoples who rely on this industry, such as Hawaii and native Hawaiians.

Read: Creative Ways Small Businesses Stayed Open the Past Year

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Personal Care Services

While personal care services may sometimes indicate at-home and senior care, in this case it refers to businesses like hair and nail salons, tattoo and piercing shops, chiropractic and massage practices and more.

Like other hard-hit industries, this one includes many lower-wage workers who are living paycheck to paycheck and can’t afford to just stop working for months. But unfortunately, that is what the pandemic shutdowns entailed; and why some of these businesses simply couldn’t survive. For the ones that did survive, though, most have been able to reopen with mask and social distancing guidelines in place, and restrictions may be further loosened as Americans continue to get vaccinated.

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