Small businesses are the lifeblood of the U.S. economy. The U.S. Small Business Association estimated that there were 30.7 million business with under 500 employees in the country in 2019. But businesses with fewer than 100 employees account for over 98% of all U.S. companies. Small businesses account for 64% of all new jobs created annually in the U.S. The coronavirus pandemic has unfortunately forced dramatic change on many of the foregoing statistics.
A Facebook Business survey from May found that nearly one-third of U.S. small businesses were non-operational at the time of the survey. The Yelp Economic Average Report for Q2 2020 found that 55% of businesses on its website that first closed in March will never reopen. Further, nearly 51 million new unemployment claims have been filed since March. There were 60,400 weekly new business applications from late March to May 9. That's a 12% decrease for the weekly averages from the previous year, according to U.S. Census data.
Americans are still opening businesses, but doing so with great caution. Entrepreneurs and retirees looking to start their own firms cannot go full throttle as the specter of COVID-19 lingers in the background. San Mateo County was the last Bay Area county added to the state watch list this past Wednesday. State mandates require many businesses, including gyms and nail salons, to close if a county stays on the list for three consecutive days. This uncertainty causes anxiety with existing business owners. Imagine the effect it has on the aspiring variety.
Consumer spending dropped by almost 40% in April and May. But it has recovered a bit, only down about 20% in July 2020 compared to July 2019. One way to make your new company recession-resistant is keeping it fully remote and online. That way employees can always work and consumers can always buy.
Emails, text messages and Zoom meetings will be commonplace for your new remote company. But the best way to keep everyone engaged and feeling like part of a team is utilizing some sort of business communications platform. Slack is the most popular and common platform. It boasts 12 million daily active users. Large firms like AirBNB, Capital One and Target are among their clients. Meanwhile Asana said in 2018 it had 50,000 paid users. PayPal, Uber and NASA are among Asana's most recognized users.
These platforms facilitate team collaboration and communication. They are also good to keep everyone accountable and engaged in the company.
Fully remote companies have the advantage of hiring anyone. Workers can reside in different states and even a different countries. Make certain to understand the tax ramifications if your crew is dispersed across the country and globe. For instance, you may be subject to taxation from both states. You may want to hire workers as contractors, or 1099 employees, to prevent some of these issues. Either way, make certain to consult a tax professional about these matters.
It's easy for remote workers to become detached from the company simply because they're never all under the same roof. If your company has 25 or more employees, consider hiring someone dedicated to curating and reinforcing company culture. This person is energetic and dedicated to the company. They have great intuition, knowing when fellow workers are happy, confused or sad. Your culture curator, or remote HR, doesn't need an official title. It may just be one of your tech people who take on the extra responsibility.
Eco Office helps current brick-and-mortar Bay Area companies transition to fully remote. We design home offices to conform with the company brand and culture. It helps create unity among remote workers and provides more identity. Give us a call today at 408-437-1700 to discuss your needs.