The impact of the Coronavirus pandemic on small businesses has been tremendous. Not only did it take the world by surprise but it brought a lot of unforeseen challenges into the mix. Since numerous lockdowns were forced upon people from all over the world, many in-person businesses like restaurants and bars had no clientele to serve, and they were forced to close.
What businesses were the most affected?
Recent studies have shown that more than 51% of business owners saw a significant decrease in sales. 17% of businesses were seeking extensions on recurring payments, and less than 60% actually managed to receive those. Figures show that businesses on the western side of the US were impacted a little more than those in the Midwest.
Another interesting thing is that in companies with 20 to 50 employees, only 37% saw a significant impact. But for those with 1-4 employees, around 48% of them had to deal with a loss, or severe issues. Simply put, larger businesses had more chances to survive, but many small businesses had to deal with major problems, and that was a crucial aspect to take into consideration.
Also, some industries had to deal with more challenges when compared to others. For example, transportation, educational services, arts and entertainment, food and accommodation companies were the ones that faced the most problems. When it comes to the least impacted businesses, we can cite construction, government, insurance, and professional services or any type of online business. These still faced some disruptions, but they still had clients, whereas the categories mentioned beforehand barely had any customers left to serve or handle.
How did companies manage to survive?
As we said earlier, not all businesses managed to find ways to survive. Some of them had to close, and their owners had to rethink their approach or start more appropriate businesses that would work under unforeseen circumstances. However, some businesses managed to stay afloat. Around 85% of them managed to take advantage of the Payroll Protection Program.
This program allowed them to bounce back from the problems caused by the pandemic and maintain their employees and offices. Around 96% are planning to maximize the PPP loan forgiveness, while 9% have a problem accounting for the loans that they received.
There’s no denying that the road ahead is still very uncertain. A lot of things are hard to figure out, but companies are focused on making changes. 27% of them are planning to reduce staff within the next 6 months. On top of that, 17% might actually focus on getting outside funding or more loans. More than 40% of them want to increase market spending. However, 20% want to grow their workforce. It’s clear that recovering from the pandemic is business-specific, but it does come with its fair share of benefits. In the end, what really matters is for every company to prepare for the future, while also initiating some failsafe. No one really knows when an issue like this, the impact of the pandemic on small businesses, can arise, so preparing for it can be extremely important.