Survey: 87% small businesses struggling due to virus; 70% have made or plan layoffs

RESEARCH TRIANGLE PARK – Small business owners are struggling with the ongoing economic reality of the coronavirus – a sharp slowdown – with 87 percent saying they have been hit and 35 percent fearing their businesses will have to shut down in the coming months. Already one third of the businesses surveyed have laid off workers and another 36 plan to do so.

So says a new survey from consumer business news site WalletHub.

The economic consequences of such havoc being wreaked on small business is big news for the US economy itself.

Small businesses employ nearly half the US workforce with 30 million such businesses [fewer than 500 employees] spread across the US, according to the Chamber of Commerce.

Some 44 percent of the US economic output is based on small business, according to the Small Business Administration.

“Around 35% of small business owners say their companies can survive for less than three months in current conditions,” said WalletHub CEO Odysseas Papadimitriou about the survey’s findings. “Given the dire circumstances, it’s understandable why more than 68% of small business owners say the government is not doing enough to help the small business community.”

And Papadimitriou warns big job cuts are coming, a warning that is similar to that issued in a webinar hosted by UNC Kenan-Flagler earlier this week.

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“[M]ost workers should be worried about their job security right now. One-third of small business owners say they have laid off employees due to COVID-19, and a slightly higher share – 36 percent – plan to do so,” Papadimitriou said. “Everyone should make a plan for what to do in the event they lose their income, just in case. This whole event should really hammer home the importance of having an emergency fund.”

However, most of the business owners don’t want to risk more deaths by a restarting of the economy quickly.

“Nearly 8 in 10 small business owners say that minimizing COVID-19 deaths is more important than reopening the economy,” said Papadimitriou. “However, most small business owners do not think the government should implement more restrictions to fight the pandemic.”

Yet 60 percent say they do oppose more restrictions.

The survey of 200 businesses was conducted by WalletHub between March 25-27.

An infographic from WalletHub offers further insight into the survey: