Given the ever-changing U.S. COVID-19 crisis, determining the breadth and depth of the impact on small businesses continues to be a challenge. In particular, it’s difficult to accurately gauge exactly how many small businesses have closed, because once they shut their doors for good, the owners can be hard to reach.
According to Alignable’s July State Of Small Business Report, small business owners self-reporting the status of their own businesses noted 16% have yet to reopen and 3% stated that they had closed for good. Based on these statistics alone, as many as 900,000 small businesses could have shuttered so far.
An Alignable Opinion Poll conducted last week to elicit small business owners’ views on SMB closures asked them to expand their focus beyond their own businesses to speculate about their communities and local industries.
Specifically, Alignable asked: “In your estimation, what percentage of the local businesses in your industry have already permanently closed?”
Perceptions of Local Industry Leaders
The results were striking. Among the 13,630 owners responding, the average estimate is that 15% of businesses have shuttered nationally. Results vary by state and industry, but the numbers are quite high nearly everywhere.
Here’s a snapshot of their perspectives on specific industries, with travel, gyms, entertainment, and bars/restaurants topping their list of categories that they believe are really hurting.
“Unfortunately, it’s no surprise to see many of these industries on this list,” said Eric Groves, Alignable’s CEO and Co-Founder. “But these estimates need to be a call to action for business owners, community leaders, and influencers in these industries. While consumer perceptions around personal safety will enable many of these industries to start down a path towards recovery, we’re also going to need a concerted effort to encourage a shift back to purchasing from local businesses for real recovery to begin.”
What Small Business Owners Are Saying
While these estimates show a troubling perspective, quotes from small business owners give a closer look at struggles within their industries and communities. Here are just a few:
“They’re not allowing visitors from the Mainland, which is devastating our economy since it has depended on tourism.
“Closing up shop and taking an over-the-road trucking job, as an independent truck driver, where I can be a leader, creating conditions that allow me to hold myself and others accountable for our own beliefs, and actions, with minimal interference!”
“Being an entertainer, I’ve had to cancel many shows. The pandemic has compelled authorities to place constraints upon crowd capacities (inside and out), causing an adverse shutdown of services provided.”
Here’s what poll participants speculated about regarding closures by state.
Based on their collective opinions, Wyoming and North Dakota are faring the best, while Hawaii, California, Florida, and Nevada are having a really tough time, partially due to tourism troubles and virus resurgence.
Here’s a list of the Top 25 states suffering from permanent small business closings, based on the poll-takers’ views.
73% of Small Businesses Call for Federal Funding Beyond PPP
With the threat of more business closures on the horizon, short-term relief provided by the PPP program, and the significant amount of time needed to change consumer perceptions, the focus may soon shift towards another round of financial relief.
In fact, in this poll, 40% of small business owners said they will be out of cash reserves in a month or less.
When asked if they believe the federal government needs to launch another major funding effort for small businesses, a whopping 73% of those polled this week said, “Yes.”
Many also noted that the crisis has continued longer than they originally anticipated, and resurgences have set them back. More than half of those polled (54%) reported that their communities have experienced a new round of outbreaks.
Some Good News: Small Businesses Continue to Pivot
While the majority of small business owners polled said they need more federal funding to stay afloat, Alignable heard from many small business owners continuing to pivot to stay in business despite challenges. Here are their stories in their own words.
“Due to the increase in COVID-19 cases in Arizona, the weight of our responsibility to get this right, and people just being too scared to go out and eat, we have decided to close for the month of July and reopen after that.”
“COVID-19 made me rethink the way I deliver my fitness services — virtually. Also, I’ve lost access to my community-based training with elderly seniors at nursing homes, mostly individuals who cannot afford personal training. But now, I’m starting over, almost from zero, with a younger population of older adults that I can reach with remote/virtual training. Huge transition for my tiny business!”
“I have operated a nonprofit for 14 years dedicated to helping those Americans who serve(d) our country. I am 73 now and disabled. We lost our two main long-term sponsors as their businesses were devastated by COVID-19. I am doing what I can to keep our mission not only continuing but growing, and I have more people leading the way. Living on less than $900 per month with my health challenges, I will continue to do what I can while God still has me here on Earth…:).”
“Our business was able to convert to a 100% virtual format. Social media, Zoom, and YouTube have actually increased client contact and access to more people than before. We are sheltering in place and not seeing people face-to-face and that has worked out well for us.”
“While this pandemic has marked the toughest time for small businesses in a century, entrepreneurial ingenuity continues to rise to the top for many, which gives us ongoing hope that eventually, many small business economies will improve,” said Alignable’s President and Co-Founder Venkat Krishnamurthy. “Now, if Washington would look into another major round of funding targeting the small businesses suffering the most, that might be the next big step in the recovery.”
Alignable.com is the largest online referral network for small businesses with more than 5 million members across North America. Alignable surveys are conducted via email with a random sample of the network’s vast membership database on a weekly basis.
Sample sizes range from 100,000 to 1 million small business owners, depending on the poll. Alignable’s samples are well matched to the U.S. Census Bureau data of U.S. businesses with 100 employees or less.
Unless otherwise noted, the poll was conducted July 11-13, 2020 among 13,630 small business owners.
Alignable’s surveys are the most immediate and comprehensive polls available reflecting the sentiments of small business owners in North America.