Survey: 50% of small businesses cannot survive more than two months of coronavirus restrictions
The National Federation of Independent Business (NFIB) Research Center on Friday released its latest survey detailing the impact of the coronavirus (COVID-19) pandemic on small businesses across the country.
The survey was conducted March 30 and utilized a random sampling of the organization’s 300,000 members. This garnered 1,172 usable responses, all small employers with 1-465 employees.
Unfortunately — but also unsurprisingly, the survey showed continued overall deterioration in the small business sector since the NFIB’s previous similar survey, which was conducted on March 20. A release from NFIB on Friday stated, “The severity of the outbreak and regulatory measures that cities and states are taking to control it are having a devastating impact on small businesses.”
In the latest survey, 92% of small employers said they are negatively impacted by the pandemic, up from 76% saying the same just 10 days prior.
The latest survey also showed 3% of small employees answering that they are positively impacted by the coronavirus outbreak. NFIB explained that these select firms are likely experiencing stronger sales due to a sharp rise in demand for certain products, goods and services. That effect will likely wane in the coming weeks as consumers feel more secure about their personal supply levels, NFIB added.
State-specific survey data was unavailable, but NFIB Alabama State Director Rosemary Elebash said in a statement, “Without a doubt, the coronavirus has taken a tremendous toll on Alabama’s small businesses. Our members are determined to get through this, and they’re working to apply for Paycheck Protection Program loans and other forms of financial relief so they can avoid layoffs and having to close the doors for good.”
Lt. Governor Will Ainsworth (R-AL) noted, “We have organized an Emergency Small Business Task Force to identify problems our businesses are facing during this difficult time. We need to bring clarity to issues and government orders that are often confusing and to effectively communicate solutions and direct business owners to resources that can help. NFIB is an indispensable member helping to guide this task force.”
Among negatively impacted small employers in the NFIB survey, 80% reported slower sales, 31% reported experiencing supply chain disruptions and 23% reported concerns over sick employees.
One other major point in the survey pertained to how long can small businesses can continue to operate under current conditions.
With the pandemic projected to continue for weeks, it is especially concerning that approximately half of small employers said they can survive for no more than two months. About 15% of small employers responded that they cannot last even another month.
Mitigation is ongoing, however. Due to escalating financial stress on the sector, more small businesses are now talking with their bank about financing needs than was the case 10 days ago. Approximately 29% of small employers have talked with someone at their bank or with the Small Business Administration (SBA) about finance options, and another 23% are planning to do so soon. A total of 38% of small employers have not, and do not, intend to do so, per NFIB’s survey.
Read the full survey here.
Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn