Most small businesses are open in some capacity and are showing some signs of optimism about the future, even while facing continued challenges from the coronavirus pandemic, according to the latest Small Business Coronavirus Impact Poll released by the U.S. Chamber of Commerce and MetLife.
Reflecting that guarded optimism, Jon Briccetti, CEO of Troy Web Consulting in Troy, New York, said that he saw other small businesses hunkering down.
“Everyone seems to be just waiting out the storm,” Briccetti said. “In general, it seems like most businesses will survive and come out of this with a greater appreciation for their customers and some new, more efficient ways of doing business.”
The good news is that almost eight in ten small businesses (79%) are either fully (41%) or partially (38%) reopened. Of the approximately one in five small businesses who reported they had temporarily closed since the start of the COVID-19 pandemic, 43% have reopened. Those who are still temporarily closed are split on whether they will reopen in the next two weeks (49% say it is likely, 47% say it is unlikely).
However, more small businesses are anticipating a longer window before things return to normal: More than half (55%) of small businesses surveyed believe it will take six months to a year before the business climate returns to normal, up from 50% last month and 46% two months ago. Six percent say it never will return to normal.
Overall, business health assessments and economic outlooks remain mostly steady from the previous month. Fifty-three percent of small businesses believe their business is in good health, compared to 50% last month. 24% rate the U.S. economy as “good,” (compared to 22% last month) and 27% believe their local economy is in good health (similar to last month’s 25%). However, the number of small businesses saying the U.S. economy is in “very poor” health shrunk to 18%, from 29% last month.
To give more perspective on state and local economies, the U.S. Chamber recently released a state map showing how quickly unemployment claims rose in each state over the past weeks. That map shows all 50 states have seen at least about 10% of their workforce file unemployment claims since the start of March. Also, in two-thirds of states (33), more than 20% of workers have now filed a claim and 10 states have now eclipsed the 30% mark.
The poll also shows that expectations around cash flow and future revenue are slightly better this month. Currently, 56% feel comfortable with their company’s cash flow situation, up from last month’s low of 48% and similar to findings in late March (59%). Two-thirds (66%) are concerned about having to close again, or stay closed, if there is a second wave of the coronavirus.
Like many small businesses in the survey, Briccetti said he has concerns about his cash flow, and said it will take his small business months—not days or weeks—to return to normal.
“Overall, the current state of our business appears O.K. However, we have been impacted in ways which likely will become worse as time goes on, even if businesses begin to re-open. The major hits were to cash flow and our sales,” Briccetti said. “Our sales pipeline has been hit pretty hard, which will have an impact about three to six months out as that is the average time to convert an opportunity into a project. The jury is out on how bad that hit will be.”
The poll found a mixed picture when it comes to hiring. The majority (71%) say they have the same number of employees as in February of this year before the COVID-19 pandemic began in the United States, but 22% report having fewer employees. Among those that report having fewer employees now, more than half (55%) anticipate rehiring or bringing back most of those employees in the next six months.
Reopening Adaptations and Concerns
The poll also found that small businesses are already adapting to new ways of doing business. Eighty-three percent of small businesses that have not permanently closed report that they are making, or plan to make, adaptations in response to the coronavirus. Of the businesses making adaptations, nearly half (48%) have either started, or plan to start, more frequent cleaning/disinfecting of surfaces, while 44% are asking (or plan to ask) employees to self-monitor for symptoms and stay home if they are feeling sick.
Four in ten small businesses are making, or plan to make, adaptations around wearing protective gear (40%) or requiring six feet of distance (39%) for employees and customers. As businesses begin to make these adaptations, it is worth noting that more than six in ten (62%) are concerned about the risks the virus poses to their employees and customers.
“Small business owners are cautiously optimistic about opening their doors again. But they remain concerned on what the post-COVID world looks like and how they can successfully reopen, while ensuring the safety for their employees and customers,” said Suzanne Clark, president, U.S. Chamber of Commerce. “Business owners across America need clear guidance at the federal, state, and local level on how to reopen their businesses safely and sustainably.”
For small businesses that are ready to reopen, the U.S. Chamber has created a Small Business Reopening Guide and a customizable workplace flyer to show customers and employees the steps they are taking to keep them safe.
As for the longer-term picture, Briccetti is not quite sure what’s next.
“It's tough to see travel, tourism and entertainment hit so hard at the same time, I think many people are saving money by not spending in these categories,” Briccetti said. “Will we have the rebound ‘optimism’ we are expecting? And will there be a second peak of COVID cases that forces us back into our homes? Those two factors alone will have the ultimate say in what happens to the national economy and I think it is too soon to tell.”
The Small Business Coronavirus Impact Poll is a special monthly coronavirus report, separate from the quarterly MetLife & U.S. Chamber of Commerce Small Business Index. Research for the report was conducted by Ipsos from May 21 – 27, 2020, prior to the civil unrest now gripping cities across the country. To read the full report, visit uschamber.com/sbpoll.