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March 24, 2020

Survey outlines outbreak’s small-business impact

Michael C. Bingham
By Michael C. Bingham

My, how fast the business world changes these days.

Just 10 days ago the Research Center of the National Federation of Independent Business released results of a survey on the impact of the coronavirus crisis on small businesses. As of the survey date (March 13), less than three-quarters (74 percent) of responding companies reported they had been impacted adversely, or at all, by the virus outbreak.

Monday morning the NFIB released updated survey results. The magnitude of disruption now on the small-business sector, the NFIB reports, is profound. 

Currently, 76 percent of small businesses report being negatively impacted by the COVID-19 outbreak, a three-fold escalation from just 10 days ago.

One in five (20 percent) of smaller companies say they are not currently affected by the outbreak, although more than three-quarters (77 percent) of them foresee that changing if the outbreak spreads to or spreads more broadly in their immediate geographic area over the next three months.

If there is a sunny side (however pale), it is that about 5 percent of respondents say their companies have been positively impacted. Most of these firms are experiencing stronger sales due to a sharp rise in demand for certain products, goods and services. 

Of those businesses negatively impacted, 23 percent say they are experiencing supply-chain disruptions, 54 percent reduced sales, and 9 percent sick employees.

Almost all small-business owners are taking some sort of action adjusting to altered economic conditions or to buffer themselves from potential disruption. Just 6 percent of owners have not taken any action in response to the outbreak, a dramatic departure from more than half (52 percent) not taking action less than two weeks ago. 

While almost half of small-company respondents (47 percent) say they have not communicated with their bank or other financial partner about financing needs, 30 percent say they are planning to do so soon. Another 13 percent have talked with their personal bank already, 9 percent with the SBA about the agency’s disaster-loan programs, and 1 percent with an online lender. 

This survey was conducted by e-mail March 20 with a random sample of NFIB’s membership database of about 300,000 owners of small businesses (fewer than 360 employees). NFIB collected 700 usable responses. 

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