With nearly 100% of companies reporting being impacted by COVID-19, EDOs are reshaping the BRE program to meet unprecedented needs. Virtual BRE visits, increased information sharing, financing programs, and revisiting incentive compliance are just a few changes being made to BRE programs. By examining business impact, precautions being taken, and assistance needed, EDOs can gain a better understanding of how to best aid businesses amidst the uncertainty of COVID-19.
Starting in April, Creative EDC began offering free COVID-19 business impact surveys as our way of supporting the economic development community. Eleven communities have taken advantage of the free service to date. We provided them with a confidential survey, branded it from their EDO, and gave them full access to the results. We gleaned several things from combining the 600+ survey responses about the impact of COVID-19 on businesses as well as how the pandemic is reshaping BRE programs.
How Businesses Have Been Impacted
Impact of COVID-19
An initial survey question asked, “has your business been impacted by COVID?” Unsurprisingly, almost 96% of respondents indicated that business has been impacted. We have seen other similar surveys where the response rate is 100%.
Has your business been impacted by COVID?
The question that followed asked, “if your business has been affected, how has it been affected?” From 12 offered answer choices, including a category for ‘other,’’ the top four identified impacts by respondents were a decline in sales (67.2%), business cancellations (41.7%), supply chain disruptions (34.3%), and accounts receivables (31.8%). Further, 25% of respondents have had to reduce their workforce.
If your business has been affected, indicate how.
Along with general impacts to businesses, the survey also asked how operating capacity has been impacted. Roughly 40% of businesses are operating at 75% or greater capacity, while approximately 20% of respondents indicated that their businesses are operating at less than 25% capacity. Examining this data about how businesses and their operating capacities are being impacted exemplifies how almost no business is exempt from experiencing some variation of impact from the pandemic.
At what capacity are you operating?
Precautions Implemented as a Result of COVID-19
In an attempt to alleviate the harmful impacts businesses are currently facing, many companies have implemented precautions to prevent or respond to COVID-19. From nine answer choices, the top precautions identified by respondents indicate that the measures most commonly used have been new and expanded sanitation measures (70.8%), sharing information on how to stay healthy and reduce the spread (56.4%), cancelled or rescheduled events (51.8%), cancelled or restricted travel (34.5%), and allowing some or all employees to work remotely (27.7%). These precautions can be used as an example to other organizations on how to implement measures to prevent or respond to COVID-19 to hopefully alleviate potential impacts.
If your company has implemented precautions to prevent or respond to COVID-19, what are those precautions?
Assistance Needed from EDOs
We wanted to know what assistance businesses need from EDOs, chambers, and other business support agencies. Our survey question asked, “what assistance do you need from the economic development office and our partners?” Out of ten options for assistance, the top three identified by respondents were resources for business recovery funding (55.6%), current updates from local, state, and federal sources (53.6%), and resources on business policies for COVID-19 response (28.7%). Ultimately, almost all businesses responded to being impacted by COVID-19 in some way, all are taking some level of precautions, and all could benefit from more help from EDOs.
What assistance do you need from the economic development office and our partners?
How to Reshape Your BRE Program
Reshaping the BRE Program
The BRE program should be reshaped not only to meet the immediate needs of COVID-19, but also the needs of all businesses during the recession. Just as in the Great Recession, BRE programs will need to shift focus to financial support and retention of at-risk companies. Some suggestions for reshaping your BRE program are:
- Invest in virtual meeting technology and staff training to move BRE visits virtual. It will likely be some time before companies allow visitors into their facilities in the same numbers as pre-COVID.
- Develop online networking opportunities like LinkedIn discussion groups, discussion boards, and virtual networking meetups.
- Revisit financing program such as revolving loan funds and grants. Seek grant opportunities (EDA, USDA, foundations, etc.) to add new funding to expand these programs. (Note: US EDA released a statement on 6/7/20 about accepting non-competitive CARES Act Recovery Assistance funding applications from grant recipients to fortify programs to assist communities in responding to the pandemic.)
- Revisit the terms of loan and grants programs. Extending loan term and lowering grant matches will make the programs more feasible for companies.
- Revisit incentive compliance requirements for existing businesses with current incentive agreements. See our last blog post about incentive compliance in COVID.
- Revisit your “at-risk” company profile to identify companies at high risk of downsizing and/or closing. Focus retention support services on these companies.
- Connect companies to innovation resources like SCMEP, Industrial Expansion Solutions, and GENEDGE. To stay competitive, companies will need help innovating. Many will be looking to automation as a way to reduce labor costs.
- Connect companies to resources that help them identify new markets. These could be regional and state export assistance agencies, manufacturer networks, and small business development centers.
“Pivot” is a word that has been much used in the last three months. EDOs should be ready to pivot the BRE program quickly – again and again. One way to stay on top of the current needs of business is to deploy BRE surveys every few months.
Creative EDC’s offer of free BRE surveys was initially set to expire on May 30. We extended the offer through August 31. We will provide up to 10 free BRE surveys each week. For more information, see our COVID-19 webpage or contact Crystal Morphis, [email protected].