What is an Essential Business?

State and local governments define which businesses can remain operational during the coronavirus pandemic. Though this offers flexibility for each community, it has also caused confusion about the definition of "essential business."

Just because a business is designated as essential does not mean that it can operate without restrictions; likewise, just because a business is considered non-essential does not mean that the business must close their operations. 

This guide examines the general agreement about what being essential or non-essential means, as well as what it means for your small business.

Examples of Essential Businesses

As small businesses read their state's executive "stay-at-home" orders, they may wonder which category their business falls under: essential or non-essential?

Basically, the federal government has tasked states, counties, and cities with defining essential and non-essential businesses. Therefore, the state and/or local government your business operates under dictates what an essential business is in their jurisdiction.

Some states have issued executive orders, while some states have left this task to the county and city governments. If both your city and state officials have created executive orders, you must follow what your city’s mayor has advised in addition to the state order. Your local authority has compiled lists of which businesses they believe provide a highly important service so people can get what they need to survive.

If you're still unsure of which category your business falls under after reading this article, check your local authority's executive orders. Our state guides to Coronavirus Small Business Relief include the available executive orders for each state.

Even though different states have variations of what they consider "essential," there are often similar essential categories across all executive orders:

  • Health care
  • Food and agriculture
  • Gas stations
  • Pharmacies
  • Garbage collection
  • Transportation systems
  • Banks
  • Post offices
  • Law enforcement
  • Automotive repair
  • Laundromats
  • Power plants
  • Shelters

These businesses are thought of as "essential" because they supply our basic needs. If you believe your business to be essential and it's not on the list, you can request to be designated as an essential business with your local authority.

Examples of Borderline Essential Businesses

Here is a short list of what businesses some states have been differing on: 

  • Liquor stores 
  • Firearms retail
  • Construction
  • Industrial manufacturing
  • Cannabis dispensaries
  • Hardware stores
  • Office supply stores
  • Pet supply stores (most states have designated these as essential)

There are reasons for each of these businesses to remain open, but they may not be as vital for the whole community. For example, because withdrawal from alcohol can be extremely dangerous for substance abusers, most localities have decided to let liquor stores remain open.

Some businesses have tried to stretch the meaning of the word "essential" to keep their establishments open and their employees working during the coronavirus pandemic. However, we advise you to use your best judgment and remember that we need to flatten the curve to keep our communities safe.

Examples of Non-Essential Businesses

Generally, most states have agreed that these businesses are non-essential at this time:

  • Theaters
  • Gyms and recreation centers
  • Salons and spas
  • Museums
  • Casinos and racetracks
  • Shopping malls
  • Bowling alleys
  • Sporting and concert venues

A good thing to remember about non-essential businesses is that they mostly provide recreational activities. That means they don't provide "essential" services related to groceries, health and financial support, or utilities.

However, some states have decided to preserve several recreational activities for the benefit of their citizens' physical and mental health. For example, Arizona has left golf courses, nail salons, and spas open for business.

Check With Your Local Authority

In any case, business owners should check with their local government (state and city) to find out how to best follow the recommended guidelines and/or executive orders. This is the most effective way to ensure you're making the right choice in whether to open with restrictions or close for the safety of your employees and customers.

During this public health crisis, it is important to decrease the rate of the virus's spread by practicing social distancing. Let's all work together to stop the spread so we can eventually enjoy all of what businesses have to offer.

Related Articles