It's no secret that the COVID-19 pandemic has had a devastating impact on the economy, and small businesses have been the hardest hit. Thousands of operations came to a halt, and hourly workers saw reduced hours or were outright laid off.
To track and measure changes in business conditions during the COVID-19 pandemic, the US Census Bureau sent out their experimental Small Business Pulse Survey, or Business Pulse, to thousands of small business owners across the country. The survey questioned owners about COVID-19's overall effect on their business and their outlook on future operations. It was conducted via email and updated weekly from April 26 to June 27.
Now that the Small Business Pulse Survey's data collection period has closed, let's compare the effects on small businesses in the first weeks of the pandemic with the last week of the data collection period and see if we can find some good news.
Small Businesses Are Slowly Regaining Strength
It should be no surprise that most small businesses were dramatically affected during the early weeks of the COVID-19 pandemic. In the first week of the survey, 51.40% of businesses across the country experienced a large negative impact on their business operations, while 38.50% experienced a moderate negative impact.
Reported Negative Impact by Sector: Week One
- Accommodation and Food Services: 83.50%
- Arts, Entertainment, and Recreation: 75.20%
- Educational Services: 74.30%
- Healthcare and Social Assistance: 69.50%
- Other Services (excluding Public Administration): 64.60%
The good news is the stats showed positive progress towards small businesses regaining stability in the final survey week. Compared to week one, the percentage of businesses experiencing a large negative effect dropped to 37.70%. The bad news is, businesses experiencing a moderate negative effect increased to 45%.
Reported Negative Impact by Sector: Week Nine
- Accommodation and Food Services: 70.50%
- Arts, Entertainment, and Recreation: 68.20%
- Educational Services: 59.10%
- Healthcare and Social Assistance: 48.40%
- Other Services (excluding Public Administration): 45.30%
Three-Quarters of Small Businesses Saw Lower Revenue
The income of small businesses across the country plunged in the first weeks of the pandemic. Week one of the survey showed 74% of small businesses experienced a decrease in revenue.
Revenue Decline by Sector: Week One
- Healthcare and Social Assistance: 84.10%
- Educational Services: 82.80%
- Arts, Entertainment, and Recreation: 80.20%
- Other Services (excluding Public Administration): 78%
- Transportation and Warehousing: 76.80%
Fortunately, it seems like business is slowly picking up. The last round of the survey showed the percentage of businesses experiencing a decline in revenue dropped from 74% to 42.60%. The percentage of businesses seeing increased revenue even peaked at 20.70%.
Almost Three-Quarters of US Small Businesses Received Financial Aid
The federal government has issued multiple programs to assist small businesses in mitigating the effects of this pandemic. One of these programs is the Paycheck Protection Program (PPP), an SBA loan that helps small businesses keep their workforce employed amid the COVID-19 crisis.
In week one, almost 75% of small businesses requested PPP financial aid, but only 38% actually received the assistance. Over half of all small businesses (53.60%) did not receive any federal financial aid.
By week nine, the number of businesses receiving PPP assistance rose 72.40%. However, 23% of US small businesses still have not received financial aid from any federal program since March 13, 2020.
If you're one of the small businesses that have yet to take advantage of the Paycheck Protection Program, the time to act is now. As of this writing, funds are still available, and the application deadline has recently been extended to August 8.
Half of Small Businesses Reduced Work Hours
Social distancing and strict stay-at-home orders have dramatically impacted the work hours of small business employees. Just over 50% of small businesses had to reduce hours in week one of the survey. By week nine, that number fell to about 22%. This decrease shows some progress being made to keep staff paid and working again.
Fewer Businesses Are Closing
The week one survey statistics showed just over 40% of small businesses had to close one or more of their locations for at least a day during that week.
Temporary Business Closings by Sector: Week One
- Educational Services: 72.20%
- Arts, Entrainment, and Recreation: 70.80%
- Healthcare and Social Assistance: 62.40%
- Accommodation and Food Services: 54.60%
By week nine, businesses were making some positive progress. The percentage that closed any of their locations for at least a day dropped to only 17.90%.
Owners Estimate Six Months or More to Resume Normal Operations
The survey asked small business owners about their outlook on the future of their business. General expectations started negative and got worse throughout the survey. In week one, just 31.40% of business owners believed it would take more than six months for normal operations to begin again. This figure increased to 43.90% in week nine.
What These Stats Mean for Small Businesses Moving Forward
The spread of the COVID-19 virus has undoubtedly devastated millions of livelihoods and businesses. The world's economy hasn't seen this kind of downturn in almost a century. However, the statistics show there is hope as we start our journey on the long road to recovery.
As time goes on, more people and organizations are learning from past crises and innovating better solutions for the current one. Businesses that are proactive in finding opportunities and solutions amidst this global crisis will come out on top.
Hopefully, more positive news and faster progress towards returning to normal is on its way. Until then, we need to be properly informed on how this pandemic affects small businesses around us and do our best to support them.
Read through our Learning Center for more information and tips on how to keep your small business afloat in these trying times.