US Economy: Small Business Owners Don't Expect To Survive Coronavirus Pandemic

More than half of small business owners say they expect to close their doors for good within six months as a result of the coronavirus pandemic, a survey released Wednesday by the Society for Human Resource Management indicated. Three-quarters of respondents said they had laid off or furloughed employees.

The survey of 375 small business owners April 15-21 indicated 52% feared they’d be out of business within six months. Sixty-two percent reported a general decrease in revenue, with 47% reporting losses of 10% to 30%, 41% reporting losses of more than 30% and 13% reporting total loss of revenue. A mere 12% reported increased revenue.

More than half (54%) said they had laid off employees while 22% said employees had been furloughed. Fourteen percent said they had laid off all of their employees.

Of the firms surveyed, 250 had fewer than 100 employees.

The survey comes as government financial data released in recent days paints an alarming economic picture. U.S. factory orders posted their biggest decline in three decades, consumer spending posted its biggest decline since 1959 and unemployment was approaching levels not seen since the Great Depression.

A Yelp survey conducted indicated business closures had increased 200% in the last two weeks of March, with bars and nightclubs the most severely affected.

Society CEO Johnny Taylor called the findings alarming.

“Small business is truly the backbone of our economy. So, when half say they're worried about being wiped out, let's remember: We're talking about roughly 14 million businesses,” Taylor said, adding the research can help map out how small businesses are hurting, providing data to policymakers for making decisions.

Those queried were divided over whether the federal government is doing enough to help small businesses with 46% saying yes and 36% disagreeing. A larger percentage (49%) gave high marks to state governments with 31% disagreeing.

Two-thirds said they had applied or intended to apply to the Small Business Administration Paycheck Protection Program, a more than $650 billion fund designed to help small businesses keep employees on the payroll. By Monday, the program had less than $125 billion left after providing nearly 4 million loans.