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#3DVU Small Businesses and COVID-19. Episode 6

#3DVU Small Businesses and COVID-19. Episode 625 min read

Small business is traditionally known as the engine of most economies, particularly here in the US we know that small business really makes up the majority, um, of all of our economic throughput. I’ll put it that way. Here’s the thing though, since the world has changed due to COVID-19 this global pandemic, small businesses in particular have been dramatically impacted. In this episode we discuss the realities of COVID-19 and Small businesses around the world.

Transcript of Episode 6

LaMondre Pough: Welcome to 3DVU one conversation, three different perspectives. I’m LaMondre Pough.

David Pérez: I am David Perez.

Richard Streitz: And I’m Richard Streitz. Thank you for joining us.

LaMondre Pough: Small business is traditionally known as the engine of most economies, particularly here in the US we know that small business really makes up the majority, um, of all of our economic throughput. I’ll put it that way. Here’s the thing though, since the world has changed due to COVID-19 this global pandemic, small businesses in particular have been dramatically impacted.

In fact, there are some statistics out there that really talk about the dire situation that small business has found itself in. And David, can you share with us some of the, some of the statistics that are out there, some of the realities that small businesses are facing during this pandemic?

David Pérez: Yeah, actually on June 19th of this year, the world economic forum published an article explaining some of the, of those statistics.

And one of the biggest ones is that more than 70% of startups have had to terminate full time employee contracts since the start of the pandemic. And the other one that’s very worrying is that around 41% had less than four months of runway. That means the money that they have in their pockets to actually remain open.

So a lot of businesses have had to change the way that they’re doing business or simply close, which has opened doors for many different things.

LaMondre Pough: Yeah. When, when, you hear those kinds of statistics when you hear the reality of what that actually means. That tells you that there are a number of people who are really struggling.

And as I said, at the very beginning, small business is really the engine of the US economy especially, I know we hear about huge companies like Google and Amazon and these huge multinational corporations, but it really is the small mom-and-pop, uh, organizations and here’s the thing. That’s not something that’s just here in the United States.

That’s actually a global reality, many countries, um, many characters throughout the globe really are dealing with this. But there is something else that we also recognize. We recognize that hardship and strife is often the mother of ingenuity and you find the rise of entrepreneurs. So Richard, as we talk about and think about this topic, what do you think are some of the main factors that’s causing this incredible downturn?

Obviously, uh, you know, it’s because of everybody having to stop what they’re doing, but what are some of the other factors you believe are the reasons why small business is having such a struggle right now?

Richard Streitz: Well, I, you know, I think, it’s absolutely true that as people are, um, stuck at home and, and rethinking and, and I mean truly rethinking their own lives and what’s important to them and so forth as people aren’t moving around anymore, a lot of businesses rely on mobility.

First of all, people, tra, just traffic, whether it’s foot traffic or, or, or or word to mouth traffic and so forth, especially small businesses that can’t afford large marketing and advertising campaigns that rely on the, on the word to mouth from the localities, the regions, their neighbors, and so forth. Um, and, and so as all of that gets reduced down, these businesses are really struggling and, and start to have to deal with how to reinvent themselves, how to make themselves still relevant in the existing conditions. Um, and you know, being able to survive a week or two of closing down, which, you know, lots of small businesses, things come up. Water pipes break. It takes a week to repair them, but whatever the case may be, things happen all the time in small businesses that they’re able to absorb one way or another, some better than others, but, but they have, you know, they’re, they’re able to re rebound from that when we’re talking four months now, uh, four or five months, that is, you know, that is unthinkable. For a small business, especially when you think of the mom and pops.

And that’s what really, what we’re looking at. We’re talking about the very, you know, the small businesses that really make up the majority of businesses, you know, globally of commerce in, in a region or an area. Um, and, and so. When you start adding up all of these factors, um, you know, they don’t have workers anymore.

If, if you’re a company that’s producing a product or manufacturing, you don’t have people in their factories anymore to, to, to do that. Um, you know, if you’re dealing with sales, you don’t have the traffic to, to, to do your goods, all of this forces, the individual or the owners to have to rethink their model.

Um, and you know, as you said, at the top, necessity is the mother of invention and, and many companies are having to rethink their businesses and are trying all sorts of, out of the box and non traditional methods, leveraging the mediums, like what we’re using here. Um, um, as, as a means of contacting and, and, um, and, and having those touch points with their customers.

Um, all of this I think is, is what’s so, um, it is contributing to the effect as to why businesses are having the troubles that they are. Um, it’s really multilayered cause there’s financial, there’s social logical, there is geographical. All of these issues really sort of become, as we’ve mentioned before, uh, compounded and exasperated as a result of the, uh, uh, the COVID-19 experience.

LaMondre Pough: Yeah. Yeah. I tell you it, and thinking about just some of the things we were talking about, many of these businesses are service based businesses and they relied on face to face interaction. They relied on those kinds of things and all of a sudden that is strictly prohibited. And so your main, your main means of delivering customer fulfillment has now been significantly hampered, you know, so it, it really is a, um, it really is a dire situation for many small businesses.

So when we started thinking in terms of, in terms of, the mother of invention and innovation, I started to think, okay. So how are small businesses pivoting? How are they making those changes? Richard, you alluded to the fact that they’re using digital communications now. David, what are some of the other factors that you can think of that are contributing to this pivot?

Or how are small businesses pivoting?

David Pérez: Well, I, I want to start by framing my answer with one of Jim Rohn’s quotes. That has actually resounded a lot with me during this time. And is, it is that change is inevitable, but growth is optional. So there’s always the choice to do different things when you’re faced with a crisis.

Right. I think small businesses that are thriving right now, are the ones that were able to adapt quickly to what was going on. Right? So for example, a lot of things that happen in Costa Rica around COVID were, small businesses were closing. Right? But the small businesses that we had here in Costa Rica were mostly restaurants, mostly little shops that relied on that foot traffic that Richard was talking about.

What happened was that it opened the door for a lot of technological revolution here in Costa Rica that we didn’t have, because we were not as advanced, you can say in the delivery process of different goods, to the houses of people, since COVID forced everyone to stay home, it forced the industry to walk towards that solution.

And now you can basically find everything and anything in online, and you can buy things online and get things delivered to your door. And that was simply not an option four months back. So we’d opened the doors for a lot of people to start creating businesses and they are, they are founding, finding solutions to their problems by simply providing solutions to other people’s problems.

Right. Which is the best thing you can do if you’re a small business.

Richard Streitz: Well, what’s interesting. Oh, I’m sorry. What’s interesting about, about what you said is that there’s really two phases to that solution solving, to the problem solving, right? You had one, at one level you had, um, at, at the national level, um, uh, resolving the issue with addressing and, and mass distribution.

Um, and the trickle down of that allowed the, the option for those businesses that had their wherewithal and, and the agility to move quickly to jump on the fact that now armed with the ability to be able to deal with direct mailing and, and, and, and specific location delivery. Um, That they were able to leverage that as an option to how they could make their businesses survive.

So what’s interesting is that that’s really two levels that weren’t necessarily directly causative or that weren’t the reason or the impetus for the change. But as a result, there was a cause effect, um, um, scenario.

David Pérez: Yeah, no. And, and another interesting part of that is I have actually talked about this in the past that Costa Rica was not very prone for entrepreneurship.

People preferred to work for bigger corporations that came to Costa Rica and gave, gave jobs, gave simple stable nine to five jobs to people. The culture is changing because of COVID and the fact that people were, were at home into some, something that people are now proud to be entrepreneurs. I know that this is different from the US where people have always been proud of being entrepreneurs and actually doing their own thing.

In Costa Rica, things were different. If you were employed either by the government or by a big corporation, you were good. If you were an entrepreneur, you were like a slave of your self, right? You cannot take vacations. You can not stop working. And. Things are changing now that that perception is changing.

And I liked that very much. I think that people are growing in that sense.

Richard Streitz: So it was a cultural shift in essence.

David Pérez: Yeah!

Richard Streitz: Um, yeah, very, very interesting.

LaMondre Pough: I think that, that, that, that is something that even happens here in the US. When a person really steps out on their own and they’re, you know, they’re on this entrepreneurial journey, there is a shift in the mentality and how they approach things.

Uh, there is a shift because many people fall in love with the concept of being an entrepreneur, but not necessarily in the life of being an entrepreneur. And there is a shift that happens. So I really think, even though you, you saw it from a different perspective where it was, you know, a general cultural beliefs that, ‘yeah if you have a job, you’re good, but if you’re an entrepreneur you’re, yeah, it’s a difficult thing’.

Richard Streitz: ‘You’re unemployed.’

LaMondre Pough: You know, here it’s really an internal thing that, that switches. Because I will tell you everyone here, or most people here have the concept of, ‘Oh wow, you’re your own boss. You’re doing your own thing. That’s going to be great.

That’s gotta be fun’ until they realize that it’s not a steady paycheck and that, you know, you have, you have to create the systems that you were used to working in, that someone else had already created. But now you, all of that falls on you. And so it is a real cultural shift and it is an internal shift that happens here.

So that same thing has to happen. Now, what I’ve experienced is that once that shift happens, then, ‘Hey, it’s, everything is great.’ When you accept the fact that, you know, You know, if, if, if, if you didn’t go pick it, I’m trying to be more politically correct instead of saying, ‘you eat what you kill’.

If you didn’t harvest it, you won’t eat, you know? Um, but, but, but the truth is that’s how it is even with a regular nine to five, the truth is somebody is hunting, someone’s gathering and that’s, what’s allowing uh, people to eat. And I think that that’s a shift. Now here’s the thing that I love about entrepreneurialship.

And this is one of the reasons that I think that this conversation is so important. Once you can get the machine turning, once you can actually get things happening, you’re earning your earning an income. It is so empowering for so many people across the board. Honestly, one of the reasons that I became an entrepreneur was because I was having difficulties getting hired.

Um, and it’s not because I wasn’t qualified. It’s not because, um, I couldn’t do the work. It was just simply the reality of me being who I am in the world that we lived in. Um, and so I developed the attitude of, if you won’t hire me, I will hire myself. And in doing so I identify what skills and you know, what, what problems I could solve and what I enjoy doing, and just started creating value around that, helping people to see the value in that.

And that was empowering for me, that opened so many doors for me. In fact, it opens the doors to the very things that I’m doing now. Um, and I think people around the world are starting to wake up and experience that. This is why I believe that the internet is so important. This is why I believe that people will need access to quality high speed internet.

Because it really allows people to have access into worlds they otherwise would not. And we had a conversation prior to this, and I kind of want to delve into that a little bit more about the power of the internet in terms of what it does for the entrepreneur around the world.

Richard Streitz: Well, yeah, there’s absolutely no question that, you know, as time goes by, and again, the COVID-19 pandemic certainly amplifies the need, um, the dramatic need for that, and really exaggerates the, uh, the digital divide that does exist between peoples and groups of peoples around the world. Um, but, but it’s critically important, especially for, um, individuals who go down the path of entrepreneurship that they, um, they’re able to share and mentor other individuals that they don’t have necessarily regional access to.

And it becomes very easy once you have the medium of the internet to be able to help craft and create and innovate your own niche in, in whatever market you’re you’re wanting to create. Um, and so it is absolutely critical in being able to hone and, and allow an individual to, uh, to meet their, their, uh, their needs, whether it’s financial or, or, or otherwise.

Um, it’s so absolutely internet is just so vital. Um, so vital an item it’s, it’s now as necessary as, as water and, um, and power, you know, in regard to a utility. And that’s really, I mean, there’s a lot of great debates about that worldwide, different countries and areas and so forth about how the internet is really.

Um, it should be handled more like utility than a, um, than, than a luxury, which really it is for so many places around the world. It’s a luxury.

David Pérez: It is the pillar of the fourth industrial revolution, right? The digital economy is what we’re calling it. And that has opened the doors to the gig economy, which is what’s bringing up all of this entrepreneurship side of a lot of people. Most of them doing it as side businesses. While they’re also working on other things, but I think that COVID-19 has pushed people more towards that. You’re your own boss. You can do your own things and actually make a good living and actually create works or jobs for other people that are around you and your community and help everyone around your community to find solutions to the problems that have risen out of this, this crisis.


LaMondre Pough: Absolutely.

Richard Streitz: In many ways, it satisfies a level of frustration, I think for many individuals. Uh, people who are furloughed, people who started off, uh, with time off that then went on to extended time off to being ultimately laid off. So as the, as an individual transitions through those periods of times, until they finally ultimately got laid off by a large company. I think there’s a level of frustration for having been led on, um, uh, thinking, you know, giving, given that level of, of, of hope that, ‘Oh, well this is going to be over soon’ and then realizing, ‘no, this is not going to be over soon’. And, and, and the level of frustration that I’ve got to take control of my own destiny.

I have to do something, I can’t rely on, on an employer anymore, um, to, to help or, or to, uh, uh, to be engaged in, in, in being able to support my, my family. Um, And so as a result, I think that level of frustration manifests itself in I’m going to do it. I’m going to work for myself. I’m going to do something that I’m accountable to myself that I’m in control of my own destiny.

And, and, uh, and I think that’s, that’s another one of the ingredients that, uh, that has seen a lot of, of uptake in, in, um, entrepreneurs around the world.

LaMondre Pough: Yeah, absolutely.

David Pérez: Yeah, and I think that what’s going to happen now is that bureaucracy and governments are going to have to adapt to this new reality because in Costa Rica, it takes at least four months to start, start the business.

Now people don’t have that much time. They need it just start it right now. So what’s happening? People are starting their business outside of the laws. I was saying before, they are simply, they are not contributing taxes or anything because they’re, there’s, it’s not an option. If you don’t start now, you’ll starve.

So people are just starting. Governments, if they want to make those jobs legal and start collecting taxes, which they direly need, they need to actually make it easier for people to become real businesses and that’s going to be a shift, that’s going to be so beneficial for, for at least Costa Rica. And I know a lot of other countries in Latin America that suffer the same problem of bureaucracy, making it so hard for you to start your own business that people tend to simply not do it.

It’s more, more the cost than, than what you gain.

LaMondre Pough: Right. And see, I think that that is also another important piece of it. One of the beauties of being a small business is the ability to be agile, is the ability to change quickly, to recognize shifts and, or either to predict shifts and be ready for them to come into play.

And honestly, the government is going to have to catch up. I believe that there is even, there’s going to have to be some significant changes here in the US, um, with that as well, because you know, people are really looking at, wait a minute, this is on me, which is so empowering, which is so incredibly empowering when people say, no, I necessarily, I can’t necessarily rely on XYZ company to feed me and my family, but I’m going to have to do it myself.

And I think the other piece that is something that’s important to, to, to that, that we have to highlight is again, the need for the internet to be seen as a utility. And actually, I like what David said, um, about a week or so ago when he said it needs to be seen as a human right. Um, because I think that that is so vitally important because even though we’re talking about.

You know, the importance that this technology has in terms of being an entrepreneur in the new world. The reality is there are still so many people who are left out of that, who did get laid off from their jobs and who don’t have the opportunity to, to really be a part of the digital economy, because they don’t have high speed internet connections.

Because they don’t, they that, because that digital divide exists and unfortunately with the way things change so rapidly now, when you’re behind, you’re really behind. When you look at the growth of an Amazon, let’s say, and what they were able to accomplish in what, 15, 20 years, man.

If you’re left behind in this digital world, you are really behind.

And I, you know, before, when we talked, you know, with the, the industrial revolution and all those kinds of things, yeah. You could still catch up because it was physical labor of all. There were things that, you know, you could, you could make it with it, you can go and do those things. But now if you’re not there, you’re really left out of the party, you know?

Richard Streitz: Well, you know, absolutely. And being able to take the risks to jump ahead. So, you know, you made a point about, um, agility and being able to shift and being able to predict, um, you know, for, for many, you can make educated guesses, and being able to predict what’s happening. And certainly in this day and age, there is absolutely no data to go against in regard to, you know, what’s happened into us and where we’re going to.

There’s no metric. That anyone can point to and say, Oh, well this is what happened last time. You know, because it’s just, we’re really in an uncharted area. So it really is educated in best guess that anyone can do in regard to being able to predict and being able to move in that direction and having the stomach to move in that direction.

Because it’s, it’s hard, you know, sometimes you have to take risks and put money in places on an idea or a thought, um, a marketing idea, whatever it is. To move in a particular direction. And if it fails, you know, maybe you put all your marbles into that idea. And now you’re having to re, to rethink, step back and regroup and, and being able to have the stomach for that is something that, you know, um, that is really challenging to do.

And, and many small businesses fail because they end up not being able to recover from that. Um, but the ones that do, are able to predict ahead of the curve and be able to get that wave just right to be able to write it, you know, those end up being the leaders that others can follow suit quickly.

And again, the next level down from the innovators are the ones that can see where the curve, where the leader has moved to and follow quickly behind so that they can really create that coattail effect behind those leaders. And so that’s the next level of, of entrepreneur that can really stay on top of it, who is reading and keeping up and being able to move and, and, and, and adjust quickly.

These are all multiple levels of individuals that it takes to, to be a small individual and entrepreneur. And that is what’s really, uh, um, that’s, what’s fascinating and interesting and dynamic about, um, small businesses globally.

LaMondre Pough: Yeah, absolutely.

David Pérez: Yeah. And the new realities haven’t actually made that easier, right.

Having to deal with COVID having to deal with social isolation, having to deal with all of these things have made, like the, being an early adopter of being an entrepreneur, all that much more scary, right. There, there’s no way to predict anything right now, because we might have a vaccine next month.

We might not, things might go back to normal. So if I’m putting everything, um, of my business online, is that going to be sustainable? Is it just going to be something to patch the holes on the ship? People are having to take decisions that are not easy and make choices about things that are going to happen with their money and their future.

And it’s not easy, but what it is, it’s, it’s really exciting. I think it has opened up a lot of doors.

LaMondre Pough: Absolutely.

David Pérez: And what we need to do is make sure that the good things that are coming out of this are not only temporary, that people don’t take the good things and simply forget about it. When things go back to whatever we can call normal after this.

We need to make sure that if entrepreneurs are being able to create better businesses because of COVID that we keep those parts that made it better. Instead of reverting back to the old ways, which we know were not the best ways, because a lot of people were being left out. We need to create programs across the board to help people approach all of these amazing opportunities that we have built and let them be a part of the future, right?

We’re creating robots. We’re creating things that are going to make lives easier for people. Let’s make it easier for people to actually build those things, build those solutions for the future. And of course, as LaMondre was saying, access to the internet is going to be essential for that.

Right now not having access to the internet is actually making people completely absent in these conversations and that shouldn’t be the case.

Richard Streitz: Right.

David Pérez: People need to be heard if you want to find solutions for them.

Richard Streitz: You know, governance and policy also plays a really, really important part in that. And being able to create an environment that allows and, and, um, that allows that to operate successfully in.

I think one of the big challenges is, is that as policies are lagging way behind. Um, and, and governance in general lagging way behind in the technology fields and being able to deal with a lot of these issues. What we are, what we see right now is sort of a, a lean in being able to support only the larger, big tech companies and being able to move forward.

There’s very little that allows the little guys to come be able to come in and be able to push innovation. And I think as those policies are adjusted and, and, and allowed to be more open, um, and to allow that I think, um, you know, that that is really the right solution. So I agree a hundred percent David.

LaMondre Pough: Absolutely. And I’ll tell you, um, is this is a fascinating conversation when you really look at, um, first of all, the significance that small business plays in all of our lives and what that has meant for the empowerment of individuals, what does it mean to be an entrepreneur and what can being an entrepreneur do for the individual.

Um, there’s something that, that I, I want to do because we’re, we’re, we’re winding down on time. I want to encourage people. I wanna encourage you. If you’re watching this, if you’re listening to this, I want to encourage you to really, everything is uncertain right now, the whole world has changed and there’s a whole lot of uncertainty.

And I know a lot of people are saying, well, you know, as an entrepreneur, there are no guarantees. Well, I think with 2020 has taught all of us, is that entrepreneur or not, there are no guarantees. So if you have that idea, if you’ve had that, that, that, that, that, that the thing that you’ve wanted to do, if you wanted to step out to be an entrepreneur. You really should consider it now because here’s the thing that we’ve all realized: nothing’s guaranteed. And so if nothing is guaranteed, that means you’re failure is not guaranteed, but that means that if you don’t get started, I promise you your success is guaranteed not to happen.

So if you’re feeling that entrepreneurial urge right now, really consider it, really look into it because you really could be changing not only your life, but the lives of your family, the lives of the people you love, and someone else is watching you, someone else is seeing you out there right now, and you could be encouraging them to do the same.

So thank you for listening. It was a great show today, and we’ll catch you the next time. Wakanda forever.

David Pérez: Thanks for joining us this week on 3DVU, make sure to visit our website that’s where you can subscribe to the show wherever you listen to podcasts or join our YouTube channel so you’ll never miss a show. While you’re at it, if you find value in the show, we appreciate it if you will leave a like or comment or simply tell a friend about the show. That would really help us a lot too. If you would like to join our conversations, you can join our Facebook community 3DVU, three perspectives, one conversation.