Coronavirus is impacting small business in the U.S. & around the world. Franchise expert Derek Cafferata shares his thoughts on what might be in store for small business owners.

Coronavirus: What We Know So Far

The recent Coronavirus outbreak, now referred to as COVID-19, first originated in Wuhan, China in December 2019. It is yet unclear as to how the disease originated, but has been identified as being passed from person to person via airborne particles. Patients infected with COVID-19 usually present with flu-like symptoms of fever, cough and fatigue, as well as difficulty breathing.

Currently, more than 100 countries, including the United States, have reported cases of the Coronavirus and, on 7 March 2020, the World Health Organization (WHO) confirmed there had been 100,000 reported cases globally.

Information gathered so far seems to indicate that the vast majority of cases are mild, with serious illness occurring in 16 percent of those affected. Those at risk of serious illness from COVID-19 include the elderly and those with underlying health conditions, including heart disease, diabetes and lung conditions.

In order to reduce the spread of the Coronavirus, countries around the world, including the United States, have set in place some quarantine restrictions and travel restrictions. And these restrictions, according to franchise expert Derek Cafferata, are having an impact to global business growth.

Coronavirus and its Impact to Global Business Growth

“It is these quarantine and travel restrictions that will have an impact on business growth across the globe,” says Derek Cafferata, CEO and President of franchise experts All State Franchise Finders. “Two weeks in quarantine for those infected or at risk, along with the reduction in travel and tourism is having quite an impact on small and large businesses alike.”

Dine-in restaurants, tour operators and companies relying on stock shipments from overseas, particularly from China, are all feeling the negative effects that COVID-19 is having on the business world. Even those in the building industry are experiencing a slow-down as investors anxiously wait out current stock market fluctuations.

“So many businesses, including small business owners are reporting a drop in turnover since the Coronavirus has spread to an alarming number of major cities around the world,” says Derek. “And the early reports of a potential recession in 2021 are also spreading.”

Potential of 2021 Recession

Unsettled financial markets across the globe, delays with supply of products, reduced domestic and international travel and overall drop in customer spending has led to serious talks of a potential recession hitting in 2021.

“The interesting thing with what is happening globally at the moment in response to COVID-19 is that it is becoming a supply and a demand problem,” says Derek. “This is why there is a real potential for another recession in the coming months.”

Huge factories closing down for weeks at a time are affecting supply to a wide range of industries. As consumer demand slows, unemployment increases and there is a ripple-effect in the economy. Too many ripples or ripples that turn into waves lead the country, or countries, into recession.

So, what does Derek Cafferata suggest for those still hoping to get into business, or stay in business, for themselves? Well, consider those franchise businesses that do well in a recession.

Best Small Businesses in a Recession

There are some businesses that, despite a downturn in the economy, do well even when consumer spending and market confidence is slowing.

According to Derek, auto repair businesses, education-based businesses and hair and beauty businesses all seem to be able to ride through recession-like seasons with little disruption.

“Everyone needs their car serviced and/or repaired,” says Derek. “And insurance companies will continue to pay out on motor vehicle insurance claims.”

This basic need for service, despite an economic upturn or downturn, applies to the education industry and the personal grooming industry. The need for education does not slow down. In fact, as people find themselves unemployed and struggling to find another job, they often turn back to education in order to upskill or retrain.

People still require haircuts and personal grooming services. Beauty services are not something people generally cut when looking to save money. Eating out, luxury purchases, holidays and house renovations are, but routine personal grooming and beauty needs are not.

Franchising Experts Guiding Small Businesses Through Tough Times

Franchise experts All State Franchise Finders offer a wealth of knowledge, experience and sound advice to those in the franchising industry. For expert advice, contact Derek and his team at All State Franchise Finders on 1-800-544-2161 or visit allstateff.com today.