Most U.S. small businesses expect to be out of business within 6 months.
That’s from new research released today by SHRM (Society for Human Resource Management) warning that the state of small business could go from bad to worse. The survey examines the impact of COVID-19 and identifies significant, widespread economic pain — such as layoffs, furloughs, and lost revenue — as public and private sector leaders move to reopen the economy.
Meanwhile, the Miami Herald released a survey of Miami-Dade small businesses that mirrored some of these trends.
The SHRM survey of U.S. small business owners found:
- A majority (52 percent) expect to be out of business within six months; 12& say they can only keep their business going for one month.
- 54 percent have laid off employees while 22 percent have furloughed employees; 14% have laid off all their employees. However two-thirds of small businesses believe the layoffs will be temporary and that they will rehire them.
- 62 percent report a general decrease in revenue while 12 percent report a general increase;
- Of those small businesses reporting decreased revenue, 47 percent report losses of 10-30 percent, 41 percent report losses exceeding 30 percent, and 13 percent report a total loss of revenue.
“SHRM has tracked COVID-19’s impact on work, workers, and the workplace for months but these might be the most alarming findings to date,” said SHRM President and CEO Johnny C. Taylor Jr. “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.”
Relief efforts helping some
As for relief efforts, small businesses are divided. Forty-six percent say the federal government is doing enough to support small businesses, while 36 percent disagree. Similarly, 49 percent say their state government is doing enough to support small businesses and 31 percent disagree.
The survey, set to recur on June 17, also found 47 percent of small businesses were unfamiliar with the Families First Care Relief Act (FFCRA). While more than two-thirds have applied or intend to apply for a loan under the Paycheck Protection Program, 21 percent are unfamiliar with the program. More than 4 in 10 of owners agree that the PPP relief will likely arrive too late or has already arrived to late to help them.
“You can’t sugarcoat that reality,” said Taylor. “But this research can help us map it out and change it together because the findings include more than just how small business is hurting. It also provides business and policy decision-makers critical feedback from small businesses about state and federal support.” Find the SHRM report here.
The bleak national picture for small businesses doesn’t end with the SHRM report. Small businesses have pulled the plug on hiring plans at a record pace over the past two months. That’s according to a report by the National Federation of Independent Business released on Thursday.
The NFIB survey showed that a seasonally adjusted net 1% of small-business owners in April expected to create new jobs, down 8 percentage points after a 12 percentage-point plunge a month earlier. It’s the biggest two-month slide in monthly records back to 1986.
Miami-Dade County findings
In a survey conducted by the Miami Herald and released this week, about half of the 352 respondents that responded said they were “not at all optimistic” that the national or state economies would recover most of the ground lost to the pandemic by the end of 2020. Nearly 55% were somewhat or very optimist they would recover by year’s end. About 80% of them had 50 or fewer employees and 55% had 10 or fewer employees. They represented a cross section of industries.
About 30% reported laying off workers, while nearly 47% said they had made short-term furloughs. Almost half the respondents said their revenues have fallen more than 75% and half said they expect their revenues and profits for 2020 to be down more than 50% from 2019. The survey will be repeated every two months.
Three-quarters of Miami-Dade respondents said they applied for a PPP. Only about a quarter have received them so far.