Survey: COVID-19 Could Shutter Most Small Businesses

ALEXANDRIA, Va., May 6, 2020—New research released today by SHRM (Society for Human Resource Management) warns the state of small business could go from bad to worse, as 52 percent expect to be out of business within six months. The survey examining the impact of COVID-19 identifies significant, widespread economic pain—such as layoffs, furloughs, and lost revenue—that needs to be treated as public and private sector leaders move to reopen the economy. 

The survey of U.S. small business owners found:

  • A majority (52 percent) expect to be out of business within six months;
  • 54 percent have laid off employees while 22 percent have furloughed employees; 
  • 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. 

 (Full findings here.)

“SHRM has tracked COVID-19’s impact on work, workers, and the workplace for months,” said SHRM President and CEO, Johnny C. Taylor, Jr., SHRM-SCP, “but these might be the most alarming findings to date. 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.” 

“You can’t sugarcoat that reality. 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.” 

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 also found 47 percent of small businesses were unfamiliar with the Families First Care Relief Act (FFCRA) and that 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. 

The survey is set to recur on June 17. 

Resources

Media: Contact Julie Hirschhorn at Julie.Hirschhorn@shrm.org and 703-842-5152 or Cooper Nye at Cooper.Nye@shrm.org and 703-535-6447.

Methodology: A sample of 375 small business owners (owners, operators, leaders, or chief executives of businesses with 2-500 employees) was sourced from Pure Spectrum. The sample contained 250 owners of organizations with 2-99 employees, and 125 owners of organizations with 100-500 employees. The survey was conducted April 15 through April 21.

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