facebook linkedin twitter

State of Small Business Report Outlines the Struggle for Survival and Reopening

May 27, 2020 by Kate Michael
State of Small Business Report Outlines the Struggle for Survival and Reopening
A normally busy Main Street is deserted as the small businesses that line the business district remain closed after the governor instituted a shelter-in-place order in an attempt to curtail the spread of the coronavirus (COVID-19) on March 24, 2020 in Rockton, Illinois. 0 people along the banks of the R(Photo by Scott Olson/Getty Images/TNS)

WASHINGTON – The economy is in crisis, but not everyone is feeling it the same way. One of the hardest-hit sectors is America’s small businesses. Over 99% of the nation’s 28.7 million firms are small and medium-sized businesses which contribute to local economies by bringing job growth and innovation, yet are struggling for survival during this period of pandemic and instability. Between loans, paycheck protection programs, and other relief measures, experts are analyzing small business concerns to identify the best approach to help small businesses to succeed.

The Small Business Roundtable recently released a State of Small Business Report, produced in partnership with Facebook, that outlines the struggles small and medium-sized businesses (SMB) are facing during the COVID-19 pandemic and as they are attempting to reopen. 

The Roundtable surveyed approximately 86,000 small and medium-sized business owners, managers, or workers to better understand their current circumstances. About 9,000 of those surveyed reported that they were “self-employed providing goods or services” or that they “produce goods sold for personal income” but did not otherwise self-identify as an “owner” or “manager” of a business.

Circumstances for SMB are increasingly dire due to the nation’s uncertain economic atmosphere. In fact, 31% of survey respondents reported that their business had stopped operating altogether. Whether they closed to comply with government orders or halted business due to lack of clientele or financial challenges, these businesses — and their workers — anxiously await a reopening strategy. “Being furloughed from my full-time job and released from my part-time as a single mother of two kids is very stressful,” shared one respondent.

Small business owners said that they worried most over finances, including securing the capital necessary to pay rents and wages. Supply lines continue to be an under-appreciated concern, both due to limited supplies and delayed shipments. And customer behavior is also worrying, with a lack of demand cited by 20% of survey respondents. “We have lost almost all clientele, and cannot afford to pay for our home and bills,” one said. 

Some businesses have adapted and seen success by turning to the internet, even if they admit the adjustment causes some growing pains. Fifty-one percent of SMB said that online client interactions were on the rise, with 36% of respondents claiming that they are now conducting all business online. Internet sales have helped these businesses to remain operational and reach a new base of clients during the pandemic, though e-commerce requires different skills. “My company [now] has WebEx meetings and team sites,” someone answered. “We were able to bring home our work set up, including chairs and standing desk.” But not everyone can work remotely; some industries require physical functions or in-person interactions.

In addition to the physical/virtual duality, SMBs are struggling to simultaneously manage both personal households and business functions. It is interesting to note that more women owners/managers reported that household activities were affecting their ability to focus on work, but the majority of respondents agreed that they were burning out with the concurrent responsibilities. “We have no income coming in and no way to cover our bills. Our landlords both personal and professional still need to be paid,” one said. 

The only way to get the economy back up and running is to reopen, but that might not be easy. Setting aside continuing health concerns, owners and managers have a host of uncertainties and new fears to address as they consider reopening.

“My business needs the economy opened up,” said one. “Small businesses are suffering and no amount of stimulus money can replace a thriving and functional business.” Worried about paying rents, utility bills, and workers’ wages and salaries, SMB owners suggest that zero-interest loans or other financial assistance could help them to adapt and survive. Despite the need for capital, however, some SMB owners are afraid of borrowing money. Many report that they are unsure how they will be able to pay it back and say it’s challenging to figure out how to apply for a loan in the first place. Many SMB owners say they may need to use their personal savings to reopen. 

And even in those businesses that have managed to stay open, employees are still facing economic uncertainties. “We need to stabilize our business for the long term in order to bring employees back from layoffs,” said one owner. Many of those workers fortunate enough to have jobs in businesses currently still operating, especially restaurant and hospitality employees, struggle without access to sick leave or paid time off. 

Despite all of this, the State of Small Business Report still offers some slivers of optimism. Nineteen percent of owners and managers of closed businesses said they were still keeping workers and paying at least a portion of their wages. And even with current distressing circumstances, only 11% of operating businesses surveyed expect to fail in the next quarter. 

A+
a-

In The News

Health

Voting

Economy

US Economy Grew 5.7% in 2021 in Rebound From 2020 Recession

WASHINGTON (AP) — The U.S. economy grew last year at the fastest pace since Ronald Reagan's presidency, bouncing back with... Read More

WASHINGTON (AP) — The U.S. economy grew last year at the fastest pace since Ronald Reagan's presidency, bouncing back with resilience from 2020's brief but devastating coronavirus recession. The nation’s gross domestic product — its total output of goods and services — expanded 5.7% in 2021.... Read More

January 27, 2022
by Dan McCue
Fed Leaves Interest Rate Unchanged, But Signals Increase ‘Soon’

WASHINGTON — The Federal Reserve left interest rates unchanged on Wednesday, keeping them near zero, but signaled a raise in... Read More

WASHINGTON — The Federal Reserve left interest rates unchanged on Wednesday, keeping them near zero, but signaled a raise in rates could come soon if inflation continues to run above its preferred target and the job market remains strong. The rate at which the nation’s central... Read More

As Fed Meets, Investor Angst Over Rate Hikes Spooks Markets

WASHINGTON (AP) — Wild volatility in the stock market this week has put heightened scrutiny on the Federal Reserve's meeting... Read More

WASHINGTON (AP) — Wild volatility in the stock market this week has put heightened scrutiny on the Federal Reserve's meeting Wednesday and whether the Fed will clarify just how fast it plans to tighten credit and potentially slow the economy. With high inflation squeezing consumers and... Read More

January 26, 2022
by Dan McCue
Majority of Cities Felt Financial Wallop Within Weeks of COVID’s Arrival

CHICAGO — Despite an almost immediate infusion of emergency federal funding, the majority of America’s largest cities saw a sharp... Read More

CHICAGO — Despite an almost immediate infusion of emergency federal funding, the majority of America’s largest cities saw a sharp and lasting decline in their fiscal well-being when the coronavirus reared its ugly head, a new report says. Published by Truth in Accounting, a think tank... Read More

January 21, 2022
by Dan McCue
Global Leaders Facing Complex, Often Divergent Economic Challenges in 2022

GENEVA, Switzerland – Policy makers the world over will face a complex and often divergent set of economic challenges this... Read More

GENEVA, Switzerland – Policy makers the world over will face a complex and often divergent set of economic challenges this year as COVID wanes and other challenges, ranging from inflation to record fiscal debt levels, retake center stage, said participants at the Davos Agenda, a virtual... Read More

Biden Chooses Three for Fed Board, Including First Black Woman

WASHINGTON (AP) — President Joe Biden will nominate three people for the Federal Reserve's Board of Governors, including Sarah Bloom... Read More

WASHINGTON (AP) — President Joe Biden will nominate three people for the Federal Reserve's Board of Governors, including Sarah Bloom Raskin, a former Fed and Treasury official, for the top regulatory slot and Lisa Cook, who would be the first Black woman to serve on the... Read More

News From The Well
scroll top