San Diego’s Small Businesses Need Your Support Now More than Ever
It takes strong commerce to build vibrant communities, and neighborhoods rely on local tax dollars for those vibrant communities. They also rely on local businesses to provide the funding for sports teams, charities, nonprofits and many school programs. What no one ever thought about is, “What if we are hit with a pandemic that impacted these local businesses? What effect would it have on our neighborhoods?”
Few among us ever expected or prepared for an unprecedented crisis like the one that is facing us, forcing businesses to close, employees to lose jobs and turning the world upside down.
Just as the coronavirus outbreak has a direct impact on the physical health of the people in our region, it has already begun to take its toll on the economic health of San Diego. We are seeing businesses and organizations forced to shut their doors to limit the spread of the virus on a level never seen before.
Political leaders in San Diego and Sacramento keep adding to a long list of community restrictions to protect constituents. Now, we are down to a limit of 10 people in the same room. Restaurants have been forced to close their doors to everything except takeout. Bars, breweries, coffee shops and wineries have all been closed, at least until the end of March.
We have also seen many employers send staff home to work remotely to reduce their risk of exposure to coronavirus. Additionally, all travel has been discouraged, which is particularly damaging to San Diego considering how important tourism is to our economy.
As a regional Chamber of Commerce, we are hearing directly from members how damaging coronavirus is to their business. The hospitality industry has been hit especially hard with all tourism coming to a halt, from hotels to events.
The chamber recently had to reschedule an event of our own, San Diego Women’s Week, to August from its original date in March. The chamber is not the only one canceling, rescheduling or postponing events. This is being done globally and resulting in a huge loss of revenue tied to lost jobs and wages. In rescheduling Women’s Week, we had to postpone work for 10 separate small businesses, audio visual crews, florists, caterers, movers and many others. Events provide a critical revenue stream for many small businesses and that is often the main source of revenue to carry the company or organization.
Employers aren’t the only ones who are feeling pressured as a result of coronavirus’ spread. Employees have their own unique challenges as well. Families with children are now tasked with finding childcare while they are working. Many have to balance caring for their children and remain a productive employee or, again, turn to outside help.
Business closures and lack of revenues have led to staff hours being cut, or worse yet, staff being laid off. This will impact all businesses as there are no dollars to spend and the community will be holding back to provide for their families during this unprecedented situation. Both scenarios can potentially place families with unexpected financial burdens that can effectively end all non-essential spending, like eating out, buying toys or other things necessary to keep a local economy healthy.
While we may know how this virus can directly impact us in the short term, what we don’t know is the long-term effect that will be felt within our communities. When businesses, organizations and citizens stop spending money, all communities and businesses will suffer. A community’s tax base is grown through the revenue generated by the sales tax. When you spend money locally, the tax base grows and is then reinvested to fund projects like road repairs and school improvements.
We are also seeing a dramatic spike in online purchasing to avoid contact with people in public places. While this is great to avoid spreading the virus, it has a major impact on the overall health of the region. When we purchase goods online, only a fraction of the sales tax stays local, whereas shopping with small businesses means a marginally larger percent of that sales tax stays within our community to be reinvested on local projects.
It is critical that small businesses, now more than ever, become innovative and find different ways to connect with consumers. Clearly, technology will be paramount to the success of businesses going forward. After this, we will see a permanent shift and a new normal in the way that business is done.
Debra Rosen is president/CEO of the North San Diego Business Chamber.