Struggling small businesses hope more Covid relief is on the way

Almost two years into the Covid-19 pandemic, many small businesses are still struggling.

While financial assistance for those impacted by the crisis has ended, some of the hardest hit industries, including gyms, hotels and restaurants, are pushing for more relief. For many, the omicron surge dealt a big blow.

In the restaurant industry, 88% of operators experienced a decline in consumer demand for indoor on-premises dining because of the variant, according to a survey by the National Restaurant Association. Three-quarters said business conditions were worse now than three months ago, and 74% reported their restaurant is less profitable now than it was before the pandemic.

“The restaurant industry is in this situation not because of financial waste or mismanagement on our part,” said Sean Kennedy, executive vice president for public affairs at the National Restaurant Association.

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“We are in this position because of a national emergency, a pandemic, that needs a national response.”

To be sure, there was a response after Covid devastated the economy. The Small Business Administration rolled out forgivable loans through the Paycheck Protection Program and aid through its Economic Injury Disaster Loan program.

Grants for the live entertainment and arts industry were given through the Shuttered Venue Operators Grant Program, while restaurant operators received grants through the Restaurant Revitalization Fund. The latter saved more than 900,000 jobs and helped 96% of the recipients stay in business, Kennedy said.

Yet it wasn’t enough, he argued. The fund had $28.6 billion, which was paid to recipients, but there’s about another $48 billion in pending applications that missed out.

Nearly 50% of restaurant owners who didn’t receive revitalization grants think it’s unlikely they will stay in business beyond the pandemic without help, the association’s survey found. The National Restaurant Association Research Group polled 4,200 restaurant operators Jan. 16-18.

Restaurants typically have profit margins of 3% to 5%, but need to run at full capacity to hit that, Kennedy explained. Not only has there been decreased consumer traffic thanks to omicron, operators are facing worker shortages, which may prohibit them from operating fully, and higher costs due to inflation.

“When you take all of these things and put them together, you really have a perfect storm for a business that is marginally profitable in the best of times,” Kennedy said.

Stephen Hightower, managing partner of City Group Hospitality, is weathering that storm right now.

The restaurant group, which has several locations in Baton Rouge, Louisiana, quickly pivoted when the pandemic hit. It provided take-out service and got into the school lunch…