COVID-19’s Impact on Local Independent Businesses in Greater Philadelphia

In cities across the United States, COVID-19 has devastated local independent entrepreneurs, including small businesses dedicated to sustainability. That is certainly true for Philadelphia, which Pew research determined to be an “underperformer” in small company activity compared with many other cities.

“No one in our network has been unscathed,” says Anna Shipp, executive director of the Sustainable Business Network of Greater Philadelphia (SBN), an advocacy and membership organization for businesses committed to the triple bottom line of people, planet, and profit. Impactivate spoke with Shipp about the challenges local independent businesses in Philadelphia have faced—and how SBN is helping them maintain both their operations and their missions.

The State of Small Business in Philadelphia

Even before the pandemic, small businesses in the Greater Philadelphia area and in the city in particular were not in a strong position relative to many other cities. Although Pew found that small and midsize companies employ 40% of workers, research by Center City District (CCD) and the Central Philadelphia Development Corporation (CPDC) found that Philadelphia has lagged behind other metropolitan areas in forming job-generating enterprises.

One measure of this gap is business density, or the ratio between the number of businesses in a city and its population. The higher the ratio, the more potential opportunity that should exist. Yet among five cities analyzed by the CCD/CPDC, Philadelphia had the lowest business density—12.1 businesses per 1,000 residents versus 24.6 per 1,000 residents in Atlanta, for example. The city also had the lowest number of Black-owned firms in relation to Black residents.

“What makes Philadelphia unique compared to other cities are not necessarily the challenges small businesses face in Philadelphia, but the degree to which they exist,” says Shipp, whose organization has several hundred members.

Sustainable small businesses have some advantages in the current environment.

COVID-19’s Impact on Local Independent Businesses

Sustainable small businesses have faced even steeper challenges during the pandemic than others, according to Shipp. Consumer research cited in a recent SBN position paper points to trends in favor of values-driven businesses, and Shipp points out that these companies can and do compete with those that do not prioritize the triple bottom line. That said, sustainable small businesses face something of an uneven playing field. Opting to commit to policies such as paying a living wage or providing health insurance coverage when other companies do not can increase overhead which, in turn, can present additional hurdles.

In the face of declining sales and high unemployment, staying afloat while keeping true to their mission has become an increasingly tall task. Adding to the challenge, many of SBN’s members are restaurants, cafes, and other food-related businesses, a sector hit especially hard by the pandemic.

At the same time, local independent businesses have some advantages in the current environment. Many companies—especially restaurants, cafes, and other food businesses—have cultivated uniquely strong relationships with their local supply chains. “It helps them to be more resilient,” says Shipp. In addition, many have garnered loyalty through building strong workplace cultures as well as relationships with their community and customers.

SBN Support

When the pandemic hit, SBN responded by creating a task force. Member companies of different sizes and from diverse sectors met three times a week to share their questions, concerns, and experiences. Based on those insights, the organization gathered resources and expertise to help and developed an FAQ to add to its website that aggregated financial resources and other information about how to deal with the pandemic. Soon after, the virtual meetings became weekly calls for all members, allowing them to explore ways of sharing resources and partnering together.

Bringing insights from members together with further research, SBN reached out to local, state, and federal officials to discuss their recommendations. It also made employment attorneys, accountants, and other subject matter experts available to answer questions from members on such areas as payroll and healthcare benefits.

SBN is now running a yearlong series of virtual workshops to help businesses, including nonmembers, learn how to rebuild while continuing to support their missions. Called Rebuilding with Equity and Climate Resilience, the series will host sessions on topics ranging from hiring practices and employee policies to equitable and climate-friendly supply chains. Participating companies will use metrics from the Global Reporting Initiative, an international impact-reporting standards organization, to create goals and measure their success.

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