NFIB Study: COVID-19 Impact on Small Business is 'Profound'
Last updated 3/26/2020 at 11:38am
The National Federation of Independent Businesses (NFIB) Research Center on March 23 released data on the effect that Covid-19 has had on small businesses:
The NFIB Research Center’s latest survey on the current impact of the Covid-19 outbreak on small business offers a stark contrast from the survey released 10 days ago. The magnitude of disruption now on the small business sector is profound.
Currently, 76 percent of small businesses are negatively affected by the outbreak of the coronavirus, a dramatic escalation from just under one-quarter of small businesses reporting the same earlier this month.
About 5 percent are positively affected. These firms are likely experiencing stronger sales due to a sharp rise in demand for certain products, goods, and services. This will presumably ease in the coming weeks as consumers feel more secure about their personal supply levels.
One in five (20 percent) small businesses are not currently affected by the outbreak, but 77 percent of them anticipate that changing if the outbreak spreads to or spreads more broadly in their immediate area over the next 3 months.
This marks a sharp departure from the earlier survey where 43 percent of small businesses anticipated being impacted if the virus spread. Just 4 percent do not believe they will be affected if the outbreak escalates and 18 percent are not sure.
Of those businesses negatively impacted, 23 percent are experiencing supply chain disruptions, 54 percent slower sales, and 9 percent sick employees.
The 9 percent of owners citing sick employees likely responded out of heightened concern and precautions with sick employees showing some signs of cold or flu-like symptoms, but not necessarily because they have employees who have tested positive for the virus.
Almost all small business owners are taking some sort of action adjusting to their changing economic condition or to protect themselves from potential disruption.
Just 6 percent of owners have not taken any action in response to the outbreak, a market departure from more than half (52 percent) not taking action two weeks ago.
The level of concern among small business owners about the coronavirus impacting their business has elevated significantly over the past two weeks.
About 68 percent of small business owners are “very” concerned about its potential impact on their business compared to 16 percent in the earlier survey. Another 23 percent are somewhat concerned and 9 percent are slightly concerned. Just 1 percent are not at all concerned.
While many small businesses (47 percent) have not talked with their bank about financing needs, 30 percent are planning to do so soon.
Another 13 percent have talked with their personal bank already, 9 percent with the SBA about their loan programs, and 1 percent with an online lender.
The vast majority of small businesses are now impacted by the Covid-19 outbreak and owners are taking the threat to their business seriously.
Many owners have already sought out financial help and more are planning to do so in the near future. The outbreak will leave few, if any, owners unscathed.
This survey was conducted with a random sample of NFIB’s membership database of about 300,000 small business owners. The survey was conducted by email on March 20, 2020. NFIB collected 700 usable responses, all small employers with one to 360 employees.
Editor’s Note: The NFIB states that it is “the voice of small business, advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven.”
The NFIB has a website with coronavirus resources at https://www.nfib.com/