US side: Catherine Monson
CEO of FASTSIGNS International
President of International Franchise Association
Government isolation measures have a significant impact on my company, FASTSIGNS International. We are a franchise brand owned and operated by local business owners. We specialize in providing signage and visual design for conferences, trade shows, events, shopping displays, and promotional advertising for other businesses.
It can be imagined that the market demand for these services has suddenly dropped, and it is not only us who have experienced a decline in demand. As Chairman of the International Franchise Association, I have also witnessed in the past few weeks that this unforeseen economic crisis has impacted a large number of small businesses in the franchise industry, causing its sales to decline and its operations to be in trouble. It is important that small businesses in the United States withstand the new crown pneumonia exam. Here are three ways to help business owners get through this difficult time.
1. Guarantee cash liquidity. Getting funds is one of the biggest difficulties facing small businesses. Although running any business comes with risks, small businesses are particularly vulnerable. The Small Business Administration is affiliated with the US federal government. According to data released by the Bureau, only about half of small businesses can survive for more than 5 years.
Many indirect costs, such as rents, employee wages, utilities, etc., make it difficult for business owners to hold ample liquid cash. This problem is particularly serious in the early days of entrepreneurship. Coupled with the lack of income due to the decline in work efficiency and the new government requirements for employee benefits in response to the epidemic, our business owners will be hit hard.
In order to overcome these short-term difficulties, small businesses should call on relevant departments to provide working capital and protect their solvency. According to the “Small Business Labor Stability Fund” proposal, the US Treasury will release them from the obligation to repay financial assistance as long as companies with debt-servicing capabilities before the pandemic crisis can re-employ the same number of employees within 12 months after the epidemic ends .
This project will directly provide cash flow to the most vulnerable companies in crisis, so that they can continue to pay employees and develop after the return of customers. The bill also increased the Small Business Administration’s fast loan limit from $ 350,000 to $ 1 million. I think such bills are an important way to stabilize the market and to relieve bosses, employees and their families.
2. Guarantee access to funds. Cash liquidity is just one of many issues that franchisees need to consider. Another important issue is the major part of costs in the service industry-employee salaries. In addition, small businesses are generally burdened with the debt of the Small Business Administration, which may also put pressure on bosses. Paid vacation regulations due to declining market demandIt has become a given fact, and the layoffs of small businesses have also become a worrying issue.
In order to help small businesses pay wages smoothly, and to bear the costs of paid sick leave, paid leave, and loan repayment for employees, we need a rescue plan based on the actual situation of small businesses. In my opinion, the $ 300 billion 2020 Business Law Restoring Economic Security, Confidence, and User Tolerance proposed by Congress can play a corresponding role.
According to this proposal, the Small Business Administration will relieve lenders and borrowers of all debt costs in the 7 (a) loan program within one year and provide 90% loan guarantees for all loans. The proposal also increased the Small Business Administration’s fast loan line from $ 350,000 to $ 1 million, giving local businesses much-needed breathing space so they can stay in business and retain employees during the crisis.
3. Negotiate with policy makers. The above proposal requires the government to provide a huge amount of aid to small businesses, but our town is far from the capital Washington, and we may find it difficult to reach policy makers. Nonetheless, our voice is particularly critical at this time, and when the issue involves an emergency stimulus package or anything that affects our economic policy, we cannot let large companies speak for small businesses.
We can act alone or cooperate with other business owners. We can negotiate with lawmakers through many channels. Social media, letters, emails, phone calls, etc. are all effective channels for negotiation. However, information is more important than channels, and the message we want to convey is that small businesses are the lifeblood of communities and the economy. In this crisis, we need economic assistance.
Most Americans feel the direct impact of the epidemic through the status of small businesses-cafes, restaurants, gyms, and pet shops are closed, and friends and family are unemployed. The outbreak alone will cause the closure of 26,500 small franchise businesses. Once the bill is invalidated, the number of closed businesses will rise to 33,000.
The number of small business closures outside the franchise industry may be higher. In order to survive, we must take many measures, and obtaining the required funds and maximizing cash liquidity are the most important ones. We should convey this message to the lawmakers who have control over the economic fate of the country.
China: I love her
Vice President of Global Zhejiang Business Institute, Zhejiang University
Relevant policies of the US government also attach great importance to stabilizing the employment of small businesses, and to support small businesses to continue their business by increasing loan guarantees, thereby retaining employees in this crisis. This measure deserves recognition. China’s policy system for small businesses to fight the epidemic and resume work is relatively complete. It not only provides financing support, but also helps small businesses reduce costs in various ways.
1. The Chinese government provides financing guarantees and subsidies. In order to effectively alleviate the financial pressure of small businesses, Chinese government departments at all levels have also introduced measures to assist small businesses. In addition to guiding banks and other financial institutions to provide more effective financing guarantees, such as ensuring that the financial institutions’ small and micro enterprise credit balances are not low by 2020 In the same period of the previous year, the policy financial institutions are encouraged to increase their support for small and micro enterprises, and the insured companies that do not lay off or lay off workers who qualify can return a certain percentage of the actual unemployment insurance premiums they paid in the previous year. You can apply for deferred payment of taxes according to law, you can defer endowment insurance, unemployment insurance, and work injury insurance premiums, and call for electricity, water, and gas prices.
Government departments at all levels in China have also introduced a series of measures to support the stable employment of small enterprises. For example, special funds for job stabilization have been set up to subsidize enterprises that “stay on duty and pay” for migrant workers in key epidemic areas. Insurance companies can return some social insurance premiums. Many local governments provide special funding support to human resource intermediaries that help companies recruit workers and resume production. Some local governments have also invested in the resumption of work by foreign employees in small businesses and resumed production in small businesses. Provide necessary anti-epidemic materials.
2. Export-oriented enterprises move to China. With the global epidemic continuing, normal people flow will be affected, normal market consumer demand will be suppressed, and some consumer industries and export-oriented industries involving interpersonal contact and gathering will be greatly affected.
In addition to the general policy support for companies in these industries, some local governments have introduced measures to guide and activate market demand, such as issuing consumer vouchers, and consumers spend at merchants (places) that meet the conditions for using consumer vouchers. Can be written off after using the standard accordingly. For export-oriented enterprises, with the global epidemic continuing to spread, local governments guide and support enterprises to explore the domestic market. For example, the Ningbo Municipal Government and Pinduoduo have reached a comprehensive strategic cooperation to promote the “foreign trade to domestic demand” of 15,000 enterprises.
3. Social assistance at both ends of supply and demand. For industries affected by the epidemic, all sectors of society can help SMEs to survive the crisis from both the supply and demand sides. On the demand side, the government can vigorously implement consumer subsidies, consumer credit and other methods to activate market demand. For social public products, the government can increase public procurement efforts; companies need to strengthen consumer promotion efforts, with survival as the primary task and carrying out small profits but quick turnover. Make every effort to maintain normal cash flow.
Upstream and downstream enterprises, especially large enterprises, need to advocate the concept of group heating, maintain a certain amount of procurement for SME products and ensure normal payment.
On the supply side, the government needs to support the resumption of production of SMEs from the perspective of the industrial chain, and attach importance to the important role of SMEs in the industrial ecology. Enterprises need to build resilience in times of crisis, and strengthen their own capabilities in times of market downturn and obstruction Construction, especially through digital transformation to improve business efficiency and promote digital transactions, such as accelerating integration into digital platforms and ecosystems,And strengthen product innovation and respond flexibly to changes in future market demand.
Keywords: rescue of small and micro enterprises in economic crisis
Liu Jingshan | Translation Zhou Qiang | School
Katherine Monson, 邬 Aiqi | Wen Liu Yanzhen | Edit
Katherine Monson is the CEO of FASTSIGNS International and the chairman of the International Franchise Association.
Yi Aiqi is the Deputy Dean of the Global Zhejiang Business Research Institute of Zhejiang University.
