How small businesses have dealt with the crisis

null
Editor’s note: Some of our covid-19 coverage is free for readers of The Economist Today, our daily newsletter. For more stories and our pandemic tracker, see our hub
AS A SPECIAL-OPERATIONS pilot in the American air force, Joe Shamess was used to handling some tricky situations. But the sudden arrival of the coronavirus pandemic this year meant he faced an unexpected challenge. Together with another pilot, Brian Steorts, Mr Shamess had founded Flags of Valor, a company that focused on employing veterans to make products such as flags and gifts for employee-recognition programmes. When the pandemic hit, the company quickly lost two-thirds of its revenue.
Smaller companies like Flags of Valor have been the most vulnerable to the pandemic and its economic turbulence. Most have little in the way of financial reserves and sell a limited range of products. Tom Sullivan, vice-president of small-business policy at the US Chamber of Commerce, points to data showing that 20% of small businesses (those with fewer than 500 employees) in America have closed since the virus hit. Things are worse for black-owned businesses, which often find it more difficult to get bank…