Survey: Small business disruption has skyrocketed during health crisis
Photo / Maureen Milliken
Small businesses are feeling the pinch from coronavirus restrictions. A National Federation for Independent Business survey found that by March 20, 76% of small businesses had been negatively affected.
More Information
The negative impact of the COVID-19 outbreak on small businesses across the U.S. is profound and has skyrocketed in less than two weeks, according to a study by the National Federation of Independent Business.
Some 76% of small businesses surveyed on March 20 reported being negatively affected by the outbreak, a dramatic escalation from the trade association's report of 10 days ago, in which 23% reported a negative impact.
Businesses report slowdowns in sales, supply-chain disruptions and an increase in sick employees. More than half of small-businesses owners have either contacted lenders about financing or plan to, even if they haven't yet felt an impact. Survey responses were not broken down by state.
"The outbreak will leave few, if any, owners unscathed," said the organization, which represents more than 300,000 small businesses across the U.S. "We know the economic impact will be immense and now the question is how long will it last and how quickly can the small business sector recover once on the other side. Small business owners are anxious to seek clarity to both questions."
Changing numbers
On March 20, when the most recent survey was compiled, there were about 17,000 reported cases nationwide. As of March 24, there were 43,600. On March 10, there were 755 reported cases.
To date, there have been no federal restrictions on business related to the virus, and states have taken different approaches, with some declaring a state of emergency and limiting business to essential-only, while others have let businesses decide what to do.
The survey numbers from March 10 to March 20 virtually swapped, with 73% on March 10 saying there was no negative impact to their business. The disruption to sales and number of sick employees has increased, while supply chain disruptions have decreased.
About 5% were positively affected by the outbreak, up 3% from March 10, but that number will likely drop, the NFIB said in a news release. "These firms are likely experiencing stronger sales due to a sharp rise in demand for certain products, goods, and services.This will presumably ease in the coming weeks as consumers feel more secure about their personal supply levels."
Almost all small-businesses owners surveyed are taking action to adjust to their changing economic condition or to protect themselves from potential disruption, the survey found. Just 6% of owners have not taken any action in response to the outbreak, a massive drop from two weeks ago, when 52% said they were not taking action.
Concerns escalate
About 68% of small business owners on March 20 were “very” concerned about the potential impact on their business compared to 16% in the earlier survey. Another 23% were somewhat concerned and 9% were slightly concerned. Just 1% were not at all concerned.
Other findings of the survey:
- Of those businesses negatively affected, 54% had slower sales, compared to 42% on March 10;
- 23% were experiencing supply chain disruptions, compared to 39% on March 10;
- 9% reported sick employees (though not necessarily testing positive for the virus), compared to 4% on March 10.
- 20% of small businesses were not currently affected by the outbreak at the time of the survey, but 77% of them anticipate that changing if the outbreak spreads in their immediate area over the next three months. In the earlier survey, 43% of small businesses anticipated being affected if the virus spread.
- 4% do not believe they will be affected if the outbreak escalates; 18% are not sure.
- 47% of small businesses had not talked with a lender about financing needs.
- 30% were planning to talk to one soon; of those who already had 13% have talked with their bank, 9% with the SBA about loan programs and 1% with an online lender.
Most Recent
Most Recent
0 Comments