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Coronavirus is devastating America's small businesses — here's how one expert says they can survive

·Deputy Managing Editor
·3 min read

While the novel coronavirus has been a boon for e-commerce giants like Amazon (AMZN), the pandemic has devastated America’s small businesses, particularly those with Black owners.

The future for mom-and-pop outfits in the U.S. looks even bleaker now that Congressional efforts to stimulate the economy have stalled out as both parties have failed to agree on a stimulus plan.

How can a small business survive, and even thrive, amid a financial crisis that has seen millions of Americans lose their jobs? Roshawnna Novellus, founder and CEO of EnrichHER, a platform that allows people to invest in women- and minority-led small businesses, recommends that companies fine-tune their offerings and drill down on what they do best.

“It's really important that every business owner become laser focused on what's their most profitable service or product ... and restructure their product offering so that they can sustain and maintain through this pandemic,” she told Yahoo Finance’s “The Final Round” this week.

NEW YORK, NEW YORK - JULY 22:  A sign is posted in a bar that reads, "Closed due to Coronavirus until further notice" as the city enters Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on July 22, 2020 in New York City. The fourth phase allows outdoor arts and entertainment, sporting events without fans and media production. (Photo by Noam Galai/Getty Images)
A sign is posted in a bar that reads, "Closed due to Coronavirus until further notice" as the city enters Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on July 22, 2020 in New York City. (Photo by Noam Galai/Getty Images)

“Like what are people still buying right now? What is your highest demand? Can you reduce the number of SKUs [stock-keeping units] if you have a large portfolio so that you can become lean and focus on growth and withstanding?” she added.

The advice comes at a particularly challenging time for small businesses in the U.S. In May, the Washington Post reported on data suggesting that 100,000 small businesses had permanently closed their doors since the coronavirus ramped up in mid-March. Also in May, Robert Fairlie, an economics professor with the University of California, Santa Cruz, released a paper showing a 41% drop in the number of African-American-owned businesses from February to April of 2020.

Roshawnna Novellus, CEO of EnrichHER, speaks to Yahoo Finance.
Roshawnna Novellus, CEO of EnrichHER, speaks to Yahoo Finance.

But the outlook isn’t entirely grim for small businesses. As Yahoo Finance’s Melody Hahm reported this week, applications to form businesses in the U.S. spiked unexpectedly in recent months — suggesting the pandemic may be creating new opportunities for entrepreneurs.

For her part, Novellus of EnrichHER is working to help ensure that more women-led and minority-led businesses get access to the capital they need to continue succeeding in tough times — but it’s focused on financing companies that already have a proven business model.

“We are focused on existing small businesses that are already employers of people in their communities, because we believe that if more women-led and Black-owned businesses can keep their employees engaged, society will be more diverse,” she said. “There will be more balance in the community.”

Erin Fuchs is deputy managing editor at Yahoo Finance.

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