September 28, 2020 | New Survey Results: How Small Businesses are Managing the Pandemic and Social Unrest | By: Michael Powe, Ph.D., Director of Research, NMSC and Brittanii' Batts, Associate Manager of Projects & Research, NMSC |
We encourage you to head over to The Point to discuss these findings with your peers.
Building on our past survey research focused on the impacts of COVID-19 on small businesses, we recently conducted a survey aimed at understanding how business owners are managing the recovery from COVID-19 and responding to recent protests and social unrest related to police violence against Black Americans.
Our survey was open for participation between August 11th and August 25th. We heard from 2,049 respondents and received a total of 1,414 completed surveys from 47 states plus the District of Columbia. 31 percent of respondents came from communities with fewer than 10,000 residents, and 51 percent of respondents operated businesses that were not in a major metropolitan area. 23 percent of respondents represented businesses with a sole owner-operator, 42 percent had between two and five employees, and 95 percent had fewer than 20 employees.
Here are some of our initial findings:
The vast majority of survey respondents have reopened their business or never closed.
About 30 percent of respondent business owners indicated that their businesses never closed due to the COVID-19 pandemic. 53 percent closed at some point but have since reopened. Approximately seven percent of respondents selected the “other” option, indicating in their “write-in” answers that they’d reopened on a limited basis, whether due to limited demand, limited staffing, regulatory restriction, or simply opening by appointment only. This means less than ten percent of respondents have closed their businesses due to the pandemic and not reopened.
The data from our new survey suggests the impacts on small business closures have not yet been as severe as we projected in a report we released in April. In that analysis, we extrapolated survey data on prospective business closures during the summer and estimated that about 25 percent of the nation’s small businesses were at risk of closure by late September.
It is important to note that in both survey cases, responses were being provided based on the small business owners’ perspectives at that immediate time. With the continuation of the pandemic, there have been many variable introductions that may have effected business owners’ ability to survive. For example, the availability of PPP and EIDL funds, the timing of reopening or level of restrictions, and assistance from local organizations like Main Street programs likely effected these outcomes. As our data suggest today, going forward small business conditions could improve or further erode based on variables such as sales levels from the holiday shopping season or if additional shut downs are needed due to increases in COVID infections. What is known is that without clear data on the subject, it remains difficult to know with much certainty how many small businesses are closing nationally.
Despite hardships, small business owners are focused on not going into further debt to keep their businesses afloat during the crisis.
More than 60 percent of respondent business owners indicated they planned to leverage regular revenues, e-commerce revenues, and/or promotions with gift certificates and memberships, and did not plan to leverage credit card debt, bank loans, new lines of credit, or government loans. About 33 percent of respondent business owners exclusively identified regular revenues, e-commerce revenues, and/or promotions with gift certificates and memberships as means to finance their operations during the crisis.
Small business owners are adapting their business operations to COVID-19 in a variety of ways.
More than half of the respondent business owners have set requirements that staff and customers at their business wear face masks, placed a hand sanitizer station at the entrance of the business, posted information focused on steps their business is taking to prevent the spread of the novel coronavirus, and limited the number of customers, diners, or clients in their business at any given time. There was greater variation and sometimes less widespread adoption of changes related to minimizing customers’, clients’, or diners’ time spent inside the space, including adoption of curbside pickup, delivery models, or outdoor seating or dining.
Many of the changes seen as most useful have been widely adopted, and changes seen as important but out of reach often have barriers related to cost and physical space.
We asked survey respondents to write in the changes they see as especially successful or useful in making customers and clients feel comfortable in regard to COVID-19. The most common write-in responses to this question highlighted a few of the changes listed in the previous question: use or requirement of mask wearing represented the most common response (mentioned in roughly 33 percent of written-in responses), followed by hand sanitizer/disinfectant wipes (roughly 16 percent), curbside pickup (roughly 9 percent), online business operations (roughly 7 percent), and operations moved outdoors (roughly 5 percent).
Some notable or prototypical responses include the following:
- “Outdoor dining has been a great addition. Also, hand sanitizer being readily available and mask wearing.”
- “Staff and customers both required to wears masks, sanitation station at the main entrance, use of both doors for enter and exit only to control the flow and limited number of customers. We've also limited the amount of large furniture or store fixtures to open up the space and allow easier social distancing.”
Respondents also listed changes to operations that they wanted to put in place but couldn’t for one reason or another. These include online or e-commerce operations (roughly 10 percent), delivery services and easy pickup of goods (roughly 7 percent), and touch-free payment, hand sanitizer stations, and/or door operation (roughly 5 percent).
Notable or prototypical responses include the following:
- “Customers have requested outdoor seating options, but due to our small space, we haven’t been able to offer seating that feels distanced enough to be safe.”
- “Increasing ready-made food options for easy in-and-out access. Pickup window. Outdoor heating for patio dining.”
- “Climate and weather has been a huge hurdle since we rely on patio to serve most of our guests. We'd love to try to control climate outdoors to some degree to meet the challenges of a hot, rainy summer and the winter that's coming. Building an outside dining room on the fly is very expensive.”
More than other nonprofit or government entities, local Main Street programs have offered more consistent and greater levels of support to small business respondents.
Echoing findings from one of our earlier surveys on the impacts of COVID-19, Main Street programs offered respondents high, steady, and increasing levels of support over time throughout the pandemic, with 22 percent reporting support from a local Main Street program prior to COVID-19, 25 percent reporting such support during “stay-at-home” orders, and 26 percent reporting such support at present. Respondent business owners also indicated that Main Street programs had offered greater levels of support than all other types of nonprofit and government entities. 54 percent of respondents said a Main Street program had offered some degree of support throughout the COVID-19 pandemic thus far, and 38 percent said a Main Street program had offered “some support” or “a lot of support.” Government offices and Chambers of Commerce were the next most supportive on both questions. The fact that Main Street programs have been a consistent source of business-related support is particularly notable, given that the needs of small businesses have likely varied widely and shifted over time from a focus on accessing federal support programs to a focus on adapting business operations and business models as the pandemic persisted.
The overall level of hardship implied in responses to these questions also warrants mention. Nearly a third of small business respondents indicated they had “not received assistance from any local organizations or entities” and were facing the crisis without business-related support from nonprofit or governmental entities. It is important to note, however, that businesses may have not received support simply because they didn’t close and didn’t need any support from governmental or nonprofit organizations.
About half of respondent business owners said there had been protests in the area near their business in recent weeks. Respondents reported widely divergent impacts of the protests on business operations and community spirit.
With so much social unrest this summer around the deaths of George Floyd, Breonna Taylor, Ahmaud Arbery, Jacob Blake, and others, we asked about how small businesses across the country were seeing impacts. Half of the survey respondents said protests had occurred in the area near their business. Among those business owners who reported nearby protests, perceptions of the impact of those protests were split. For instance, while 24 percent reported that the protests had brought the community together and supported a greater sense of community spirit, 20 percent indicated the protests had divided the community. Most respondents who said a protest had occurred near their business reported no impacts from the protest (43 percent).
Finally, we asked business owners if their business had any response to the social unrest and protests. Nearly 20 percent of written-in responses explicitly cited support for the Black Lives Matter movement as a whole or support for the protestors specifically. About 16 percent of written-in responses indicated a preference to remain apolitical and neutral as businesses. About 5 percent cited concerns about safety of employees and security of the business during the protests, and about 4 percent said they kept their business closed during the protests.
A sampling of notable or prototypical responses includes the following:
- “My business has supported the Black Lives Matter movement vocally both with window signs and through social media. We are proud to be part of a community that is actively working towards equality for all of its citizens and one of our core values has always been broad, inclusive representation in our work.”
- “We have posted support for protesters and police alike. We are lucky that our local police department has been working for years to try to create positive relationships with the community at large. They even participated in the BLM protests in our area to show solidarity with disenfranchised groups. The BLM protests were all peaceful and had a specific start and stop time so that everyone was safe.”
Explore the Data
We’ve developed a pair of interactive maps where you can explore the data further and see how small businesses in your state and community are grappling with the COVID-19 crisis. In order to protect the confidentiality of individual respondents, we include aggregated data for all states and communities where we had at least five completed surveys. To explore the data, simply click on any community that has a colored dot or any state shaded in blue. The results can be easily copied and pasted into a Word doc or Excel spreadsheet. Please note that the maps may take a few moments to load.
Editorial Note: This blog was updated on September 30, 2020#Blogs#MainSpotlight#COVID-19#MainStreetForward
We encourage you to head over to The Point to discuss these findings with your peers.