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  • Writer's pictureClif Harald

Winter Brings New Business Challenges

Updated: Nov 21, 2020

Much is being written about the new challenges facing entrepreneurs and businesses as winter approaches. Gusto, the cloud-based HR platform, recently published a report predicting significant seasonal job losses and business closures, particularly in cold weather cities.

Without more government funding assistance, businesses in the retail and leisure and hospitality industries could see 1.4 million jobs lost as outdoor dining and other warm-weather pandemic accommodations become impractical. Gusto projects that half of the job gains made in retail, leisure and hospitality this summer could be lost in cold weather cities this winter. In Denver alone, that would mean a loss of 33,500 jobs and 333 businesses. The losses could be twice as great if COVID-19 cases continue surging, causing a more widespread contraction across other industries.

The National Restaurant Association reported that industry employment in September was more than 2 million jobs below February’s pre-COVID level, and a September survey revealed that nearly 1 in 6 restaurants (about 100,000 nationwide) have closed either permanently or long-term.

The winter job losses projected by Gusto would reverse all the gains made in hiring African Americans in retail, leisure and hospitality industries that were part of this summer’s modest economic recovery. Half of the employment gains of Asian and Latinx workers could also be lost, as well as three-quarters of recovery gains made among women.

There’s reason for optimism that this outlook for winter can be mitigated by recent business trends and by adaptive innovations for businesses.

The November 10th issue of NPR’s Planet Money newsletter presents surprising data on The Unexpected Boom in Startups. Whether it’s new opportunities emerging from the “weird coronavirus economy” or laid off employees “forced to strike out on their own”, the number of new business applications in the third quarter of 2020 is the highest level seen to date in an analysis of U.S. Census Bureau data.

This trend is evident in Colorado, where new applications in Q3 are up 24.3% over the pre-COVID third quarter of a year ago. New business applications collapsed when the pandemic began but have since rebounded.

Much is also be written about how cities and states can collaborate with entrepreneurs on innovations to help businesses adapt to winter.

The Center for an Urban Future featured 40 ideas for surviving cold weather generated by architects, tech experts, restaurateurs, city planners, small business experts, and others. While focused on solutions for larger cities like New York City, many of the ideas could be adapted to medium-sized and even smaller cities.

Similarly, the Canadian-based engineering firm Stantec has developed a series of “winter city design” strategies to help businesses (and cities) survive the pandemic in winter. They’re hosting a free Winter City Design Webinar on November 19th.

But perhaps the most urgent imperative of all right now is a federal government aid package that gives business entrepreneurs the means to operate safely through the winter and helps restore consumer confidence.

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