WASHINGTON—Most U.S. small-business owners fear that the worst of the pandemic’s economic impact is still to come, and half of them believe their operations can survive for a year or less before closing permanently, according to a new survey.
The pandemic and resulting economic crisis have hit small businesses the hardest. And a recent poll by the U.S. Chamber of Commerce and MetLife showed that the majority of business owners are concerned about the current economic environment due to the surge in virus cases and its impact on consumer spending.
Small-business owners say the economy is improving, however, 62 percent of them still believe the worst of the pandemic is yet to come. The majority expects that it will take six months to a year for them to get back to normal.
The survey also shows that business owners in the West are the most pessimistic about the recovery compared to those in other regions. Minority-owned small businesses are also the most negative about the outlook when compared with non-minority-owned businesses.
Many small companies see that their survival is at risk, with 50 percent reporting that they can continue for a year or less in the current business environment. Three-quarters of small-business owners say they need further government support to stay afloat as they face a tough winter ahead.
Only four in 10 business owners are confident that their business can weather the storm without closing permanently.
“The impact of coronavirus continues to take a devastating toll on America’s small businesses,” Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, said in a statement.
Bradley urged Congress to pass a “bipartisan compromise for temporary and targeted relief.”
The survey was conducted between Oct. 30 and Nov. 10 by interviewing 600 small-business owners throughout the country. Small businesses are defined in the study as companies with fewer than 500 workers, excluding sole proprietorships.
“Despite the overall view of the economy improving slightly from last quarter, far too many small businesses fear they won’t make it another year,” Jessica Moser, senior vice president at MetLife, said in a statement. “It’s vital that the voices of small business owners are heard. They still need help–a lot of it.”
Compass Coffee, a coffee chain in Washington, had to close half of its 12 locations for several months as most of its customers worked from home during the lockdowns. In order to keep the business alive, the company had shifted its operations to produce hand sanitizers.
According to Yelp’s September report, nearly 100,000 businesses have permanently closed since the beginning of the pandemic in March. Businesses that rely heavily on foot traffic, such as restaurants, have been the hardest hit. Those that continue to serve through delivery or takeout have been able to keep their closure rates lower than others, including pizza places, delis, bakeries, and coffee shops.
A study by the University of Chicago’s Becker Friedman Institute found that the trend of working from home might stick even after the pandemic ends, hurting small businesses, especially in dense cities such as New York and San Francisco.
The study predicted that worker spending in major city centers may drop by 5 to 10 percent compared to pre-pandemic levels due to the likelihood of less spending on meals, entertainment, and shopping in central business districts.