Biggest Challenges Faced by Small Business Owners in 2021

Wow. That’s one word to describe the “new normal” caused by the 2020/2021 coronavirus pandemic. Devastating is another word that fits. U.S small business owners have been particularly impacted during the economic disruption facing dropping revenue, employee layoffs, pivoting to remote operations, and more.

Here are challenges entrepreneurs running companies big and small are facing this year along with resources that can help.

Apply for the latest round of PPP funding

Securing Emergency Funding

The government put a second round of Paycheck Protection Program (PPP) funding in place for 2021. This fully or partially forgivable loan program was created to help small business owners keep employees on the payroll and cover other expenses.

NOTE: The program ends on March 31, 2021. There is a huge demand for this funding so it’s recommended that business owners apply ASAP.

Following is information provided on the SmartBiz Loans website about the PPP. SmartBiz is working hard to facilitate this emergency funding for thousands of small businesses via a swift and streamlined application. Visit SmartBiz Loans to learn more or start an application.

Who is it best for?

Businesses with less than 500 employees that are negatively impacted by the pandemic and are applying for their first PPP loan. Previous PPP loan recipients with business less than 300 employees can also qualify if they have more than a 25% drop in revenue quarter over quarter from the previous year. If you are applying for your second PPP loan, you will need to have used the full amount of funds from your first PPP loan before your second is disbursed.

How much can I borrow?

Eligible businesses (including Self-Employed, Independent Contractors, Sole Proprietors, and Single Entity LLCs) can qualify for as little as $100 or as much as $2 million. Our streamlined application will even help you calculate the allowable loan amount is based on your payroll information.

What are the loan terms?

PPP loans are 100% federally guaranteed and have a low interest rate of 1.00% and a term of 2 years. There is no collateral required and no repayment necessary for the first 10 months.

What documents do I need to provide?

To apply for a PPP loan, you’ll need to submit your business and personal tax returns, business bank statements, and payroll history report. If you use a payroll reporting service like ADP or Gusto, you can download their PPP reports.

What about loan forgiveness?

When you’re ready to apply for loan forgiveness, our integrated application uses your securely stored financial information to help ensure a fast turnaround.

Staffing shortages

When your revenue drops, an unfortunate consequence can be employee layoffs. It’s a hard decision to make during the stress of the pandemic. Not only is this emotionally upsetting, but reducing head-count can leave you short-staffed. You might have to get creative by restructuring your operations or asking team members to take on additional tasks. You can also explore cutting expenses to help you meet payroll demands. You might be surprised by the money you can save. Keep in mind that securing a PPP loan can help you keep employees on board. Learn more or start an application.

Working remotely

The latest increase in remote work can flip your workflow upside down if you are currently experiencing this shift. Work life can be stressful when you are managing employees and working from home. Read the SmartBiz Loans’ blog for strategies and tips for making your remote work transition seamless.


Employee safety

Although the news has been saturated with stories about how to social distance, it’s not as easy as it sounds in an office, factory, or other space where you run your business. Protocols to ensure safety include:

  • Before employees enter your work place, assess their health. This could include a short questionnaire or using a thermometer to check for fever before they enter the workplace.
  • Even if desks are the recommended distance apart, you’ll also need to focus on break rooms and bathrooms. If possible, make communal restrooms into one-person bathrooms.
  • Make corridors one-way traffic only to avoid face-to-face encounters. And of course, if your business can be operated remotely, put those policies in place to assure there is zero contact between employees.
  • Washing hands is one of the best ways to prevent the spread of the coronavirus. Make sure there are handwashing stations available to all employees with hot water, anti-bacterial soap, and paper towels.
  • Require employees to wear approved masks, gloves, clothing coverings, or other safety tools that makes sense for your workspace.

If your business cannot be operated remotely, put those policies in place to assure there is zero contact between employees.

For in-depth information about workplace safety with recommendations from the CDC, read Small Business Health Programs and the COVID-19 Outbreak. A 2021 PPP loan can help cover personal protection equipment, plexiglass barriers, masks, gloves, and other expenses related to safety.

Cloud migration

Transferring data to the cloud is imperative when you have a team spread out and working remotely. Here are benefits to consider if you haven’t yet taken the leap.

Accessible data

Rather than storing information on your computer or a server in your office, cloud computing stores data on the internet, accessible by any device.


Since cloud-hosted files exist in the same central location, data is automatically synced between all devices, which means your employees are using the most up-to-date version of files.

Allows for remote programs

Since specialized software is often installed on company computers in the office, cloud computing allows users to access all types of files and applications as though they were in the office – important during the pandemic.

Easy backup

Data loss can be caused by natural disasters, power surges, or hardware failure. By utilizing the cloud, important files are safe even if hardware fails.


Buying and maintaining server equipment requires time, knowledge and valuable cash flow. Prices for business-oriented cloud services are still a monthly expense, but it can be a manageable fixed expense.

Read more here: The Benefits of Cloud Computing and note that a PPP loan can help cover the expense of a cloud software solution.

Lack of “in real life” networking

In-person networking events are a great way to attract new business or form partnerships. Zoom networking events are simply not the same for obvious reasons. It’s a massive challenge facing business owners who depend on networking. You can be proactive and stage your own online networking get together. Be creative with ice breakers or fun activities to get to know each other.

Provide a recording for targeted prospects who can’t attend. You can also join Facebook groups or other online communities for more ideas or to connect. LinkedIn is becoming more and more popular as people try to restart their careers. Build a nice profile and reach out when appropriate. Join your local Chamber of Commerce. They may have online solutions that can work for you.


Although 2021 presents multiple challenges, a savvy business owner can explore options and find solutions to rebuild, stabilize, or grow their business. Visit the SmartBiz Small Business Blog for more information about operations during this pandemic.