Coronavirus Could Leave Small Business Owners Scrambling for Staff

According to a report in the New York Times, the virus commonly referred to as coronavirus or Covid-19 has not only had an impact on global public health, but on the economy as well. In Huawei, China, where the virus was first discovered, and parts of Italy, businesses are feeling the strain of shutdowns, quarantines, supply chain backups, travel cancellations and closures.

In Beijing alone, the NYT reported that 70% of restaurants remain closed, small business owners have seen profits plummet and are struggling to make ends meet. Many people in the U.S. are watching the massive spread of the virus overseas and wondering how it could impact business on local ground.

While franchise businesses often have the benefit of a larger support network and a corporate safety net, many are still at risk as small businesses that operate on tight financial margins with smaller staffs. The government in Beijing has pledged to support small businesses, who would be the most adversely affected by closures, and the U.S. could potentially do the same should the virus cause mass shutdowns within some communities.

Worker’s sick leave is another contentious topic that could impact U.S. franchisees, particularly in industries with high volumes of customers or high risk of person-to-person contamination, such as quick service restaurants. Even without the public health risk of a virus like Covid-19, many quick service restaurants struggle with employee retention and high turnover.

Low-wage laborers also often don’t receive paid sick leave, a variable that could be financially disastrous for employees needing to take time off work to prevent the spread of the virus. “If someone gets the coronavirus, and they are out of work for two to three weeks or they are quarantined, that’s a place for the government to do something,” said Eileen Appelbuam, co-director of the Center for Economic and Policy Research, as reported by the New York Times.

Whether the U.S. government will make any sweeping national mandates to protect either workers or business in the face of this public health crisis remains unclear, but it is something that small business owners in the franchise space need to consider now.