Nearly a third of small and medium business owners worry that their businesses won’t survive a second wave of the COVID-19, a new poll says.
The poll, done by KPMG Canada (KPMG), says that 31 percent of small and medium sized business owners or decision makers are worried that they will not survive through a second wave due to lack of capital or access to financing. A further 11 percent of them do not have the ability to exercise either choice in the near future.
Over half of them (54 percent) say that their “immediate focus is on survival.”
“We’re at a pivotal moment that could make or break many small-to-medium-sized companies,” says John Cho, partner and head of KPMG’s deal advisory services.
Nearly 40 percent say they worry about not being able to recover from the economic fallout of the pandemic.
Cho says that the concerns of another shutdown has left business owners “seriously looking to exit their business.”
Almost one in four (24 percent) are looking for opportunities to sell their businesses because of the high costs involved in managing and protecting their staff amid the COVID-19 crisis. Some 23 percent of them express regrets for not selling off their businesses earlier.
“The challenge is, a staggering 46 per cent of owners don’t know what their business is worth anymore because of the COVID-19 impacts,” says Yannick Archambault, partner and national family office leader for KPMG Enterprise in Canada.
Archambault added that for those who have a formal plan to sell their businesses within the next two years, 54 percent of them do not have any clue of their business worth.
Despite the challenges, 29 percent of respondents still see opportunities in the pandemic to grow their businesses organically or through acquisitions such as buying over a competitor or supplier.
When compared to their competition, 30 percent say they fare somewhat or much better than their competitors, but 23 percent of them felt they are somewhat or much worse off.
Nearly 80 percent of owners believe their businesses must go digital in order to survive, and due to the pandemic, 64 percent of the respondents say they are now exploring and adopting digital and emerging technologies. These sentiments are in line with the trend of e-commerce sales which increased by almost two-thirds year over year in July, according to Statistics Canada.
But over 70 percent of owners who seek to exit their businesses within the next five years indicated they do not have the will, desire, energy or technology to adapt their businesses to the new reality caused by the pandemic.
During the early stages of the pandemic, 44 percent of the respondents took up the federal government’s assistance programs. In the poll, 24 percent say they depended on government funds to survive.
KPMG conducted the poll from Sept.17 to Sept. 24, asking 500 small and medium Canadian business owners or decision makers about their outlooks for their businesses.
Respondents were selected from an online panel from research firm Delvina. Of the sample size, 46 percent are aged 55 and above and 62 percent are men.
In terms of revenue, 30 percent have annual revenue below $500,000, 26 percent between $500,000 and $5 million, 23 percent between $5 million and $20 million, 10 percent between $20 million to $100 million, and 10 percent over $100 million.
KPMG is an audit, tax and advisory firm.