Small businesses anticipate the worst of the pandemic is still ahead and half (50%) of small businesses see their operations continuing for a year or less in the current business climate before having to permanently close according to a new poll taken October 30 – November 10 and released today by the U.S. Chamber of Commerce and MetLife.
Amid a new surge in cases across the nation, most (62%) small businesses fear that the worst is still to come with COVID-19’s economic impact and three-quarters (74%) of all small business owners say they need further government assistance to weather the storm. That percentage increases to 83% when looking at minority-owned businesses. Only four in 10 (40%) of all small business owners believe their business can continue to operate indefinitely without having to shut down permanently.
“The impact of coronavirus continues to take a devastating toll on America’s small businesses. In fact, half of them say they can operate for a year or less before closing permanently,” said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce. “We must ensure small businesses across the country receive the assistance they need from the federal government. Not passing the bipartisan compromise for temporary and targeted relief risks the permanent loss of tens of thousands of small businesses, financial hardship for millions of Americans, and unnecessary delays in combatting the pandemic.”
Most small businesses see the need for further government support to see them through the pandemic’s negative impact. A majority (56%) disagree that they have all the support they need from the federal government for their business to succeed.
“Small businesses are the heart and soul of communities and need help from the federal government to survive. We are now nine months into the COVID-19 pandemic and this survey shows how hard Main Street has been hurt,” Bryan Owen, owner of Between Pixels in Marietta, Georgia said. “My employees and my customers are counting on a renewed bi-partisan effort in our nation’s capital to provide more help.”
The biggest concern at the moment is how COVID-19 will impact the economy. Across all subgroups—business size, region, sector, gender or ethnicity of the owner—80% or more are concerned about the virus’ impact on America’s economy.
Minority-owned businesses are feeling a bigger impact from the pandemic, report assistance being more vital, and have heightened concern about the pandemic’s impact on the local economy, their businesses, and mental health:
- 83% of minority-owned small businesses say that more federal small business relief funds are important versus 71% for non-minority-owned small businesses saying the same.
- Just over half (51%) of minority-owned small businesses are very concerned about the virus’s impact on the local economy versus 35% of non-minority-owned small businesses.
- 41% of minority-owned small businesses are very concerned about the impact of the pandemic on their small business compared to 31% of non-minority-owned businesses who said the same.
- 39% of minority-owned businesses are very concerned about the pandemic’s impact on their mental health, versus 23% of non-minority-owned businesses expressing the same concern.
Most small businesses see a long haul before things return to normal. Just a quarter of small businesses think the U.S. small business climate will return to normal in under six months, with more than half (56%) predicting between six months to a year for a return to normalcy. This is in line with sentiments expressed last quarter and in May.
“Despite the overall view of the economy improving slightly from last quarter, far too many small businesses fear they won’t make it another year,” said Jessica Moser, senior vice president, Small and Specialty Business at MetLife. “It’s vital that the voices of small business owners are heard. They still need help – a lot of it.”
COVID and the economy are the top policy issues for small business as we head into 2021. Combatting COVID-19 (44%) and the economy (44%) are the two top small business priorities for the incoming president and Congress.
The current Small Business Index score is 52.9 (a slight increase of 2.6 points from 50.3 in Q3). However, the new score remains substantially below findings before the pandemic struck: the Index score was 71.7 in Q1 of 2020, based on data collected before the full economic impact of the coronavirus set in.