By employing student research assistants from the College of Business and Center of Entrepreneurial Finance (CEF), the Stony Brook Small Business Development Center (SBDC) developed a small business recovery and resiliency webinar series to provide tools to assist small- and medium-sized businesses recover from the devastating ongoing pandemic and unprecedented economic disruption. Sponsored by BNB Bank, the student research assistants gained hands-on experience for their future endeavors.
Funded by the State and Federal Government, the SBDC provides free and confidential, one-on-one business counseling to business owners. Statistics compiled by the SBA indicate that between March and September, those virtual counseling sessions assisted more than 900 small businesses in processing more than $35 million in Economic Injury Disaster and Paycheck Protection Program Loans, thereby helping those Suffolk County businesses save more than 1,450 jobs. As problems often bring opportunity, the SBDC assisted 43 new business starts, many pivoting their business model to include manufacturing or distributing PPE equipment.
“This project was the latest example of the SBDC and BNB Bank working together to support Long Island’s small business community and I was pleased that the College of Business and Center of Entrepreneurial Finance provided the resources to make the project a success,” said Stony SBDC Director Bernie Ryba.
“The students have done an outstanding job in providing research for the three hardest-hit industries — restaurant, retail and construction — and now understand the devastating economic effect of COVID-19 as it adversely affected and shut down small businesses throughout the country,” said SBDC Administrator Martha Stansbury.
“We were overwhelmed with the number of students who volunteered to help, even knowing they might not receive any form of payment for their efforts,” said Marie McCallion, manager, Marketing and Community Relations for the College of Business.
The SBDC’s business resiliency and recovery plan sought to:
- Identify the resources needed for small businesses to function under and after the New York State On Pause executive order from Gov. Andrew Cuomo.
- Develop a strategic plan to mitigate impact to business functions, including rehiring employees as well as addressing cash flow and inventory management.
- Use in-house resources and external funding sources such as SBA’s Disaster Loan and PPP programs for the short term.
- Determine recovering strategies to return to normal, fully functional business operations for the long term.
Under the guidance of Richard Chan, director of the Center for Entrepreneurial Finance and associate professor of management, and Danling Jiang, associate director of CEF and professor of finance, students researched their respective industries for essential tools and identified problems associated with the effects of the coronavirus. They developed their hypotheses for recovery and through biweekly discussions and analysis of their findings, translated those findings to a concise presentation that provided tools for businesses to recover.
“The specific industries were assigned to us by the SBDC based on our major and area of interest, and we researched the industry to see the issues they were facing as a whole,” said Jacob Rueb ’21, a business management major specializing in finance and operations management.
Rueb said that during his research, he learned that many businesses were not ready for the restrictions brought by the pandemic because they did not have an online presence that allowed for revenue generation while their physical locations were restricted or shut down. He added that those who implemented online ordering or curbside pickup achieved a measure of success.
“We did make recommendations,” Rueb said. “Those recommendations included where to cut costs depending upon the industry and adjusting their digital marketing strategy.”
For the construction/home improvement industry, the students recommended a reduction in full-time employees and increase in part-time and seasonal employees because of a lack of new contracts being drawn up.
Yaci Chen’21, a double major in economics and business administration, said she learned that the restrictions and business contractions from the pandemic are a serious threat to the financial survival of a business regardless of industry.
“Without sufficient cash flow, businesses will struggle to meet their financial obligations,” Chen said. “However, being able to acquire loans and manage them effectively, as well as monitor a cash flow cycle, can help a small business better sustain its cash supply.”
“Some recommendations that I made to help small businesses sustain their cash supply include assessing sustainability metrics, stimulating cash flow by incentivizing cash payments, or securing near-term sales by offering warranties and return policies,” she added. “In addition, digitizing finances and using accounting software, some of which is free, to track spending and funds is also helpful. As research assistants, we created presentations for advisors to relay the information to small businesses.”
The SBA has two loan programs to help small businesses impacted by COVID-19: EIDLs and the PPP. Eligible businesses can get both of these loans and use the funds at the same time as long as they aren’t used for the same purpose.
The virtual webinar series is currently under way.
— Glenn Jochum