PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Latest Surveys on the Pulse of Small Business

By at 8 October, 2020, 9:44 am

by Raymond J. Keating-

It bears repeating that the U.S. economy is a small business economy. More than 99 percent of businesses are small-to-medium-sized firms with less than 500 workers, and small businesses employ about 48 percent of private-sector workers, and account for two-thirds of net new jobs.

Therefore, the well-being of small businesses during this pandemic economy and afterwards matters to all of us.

So, what’s the latest word from the small business community on how things are going, and what the outlook is for what lies ahead? Let’s consider some recent polling.

The Negative Effects of COVID Trending Down, But Threat of Closures Looms Large

On October 6, Alignable reported on its latest poll (taken September 18-21) of small business owners. It found that 67 percent of small and medium-sized businesses were experiencing negatives effects due to the pandemic. This large percentage, however, marks a continued downward trend over the past few months.

As for the fourth quarter outlook, Alignable found that “42% of small business owners are not anticipating having the revenues necessary to sustain their businesses into 2021. This projected impact was not only expressed by Main Street retail (which was at 45% overall), but also by B2B business owners, where 38% anticipated being at risk of closure. If these predictions become a reality, small businesses across many different industries and regions could be devastated.”

Many Small Businesses Still Not Operating

And here’s a distressing point that Alignable reported based on research from Womply: “19% of all small businesses are currently closed or otherwise not transacting.”

As for particular sectors, it was noted that 23 percent of local restaurants are closed, 36 percent of local bars, 16 percent of local retail shops, 25 percent of local health and beauty stores, 15 percent of lodging businesses, and a whopping 63 percent of local arts and entertainment enterprises.

Getting “Back to Normal” Will Take Time

Meanwhile, according to the latest Small Business Pulse Survey from the U.S. Census Bureau (collection dates 9/20-9/26), 75.2 percent of small businesses have experienced large or moderate negative effects due to the pandemic. Looking ahead, this survey found that 45.4 percent of small businesses expect it to take more than six months to get back to normal operations relative to where it was a year ago.

In good and bad economic times, it’s not unusual to hear about large businesses cutting employees. The difference comes on the small business front. That is, do we have a vibrant, dynamic, growing entrepreneurial sector or not? That’s what makes the difference, and will looking ahead.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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