BOSTON — Despite recent moves to expedite vaccine distribution and adjust the Paycheck Protection Program to reflect the needs of the most disadvantaged groups, 45% of the small businesses polled last week say they remain “highly concerned” about keeping their businesses afloat through the end of the pandemic, according to Alignable.com, an online referral network for small businesses.
Another 30% say they’re “somewhat concerned,” which indicates that three-quarters of small businesses have some degree of anxiety about staying in business before vaccines take effect across the U.S. population and a new normal can begin (hopefully at the end of Q2).
Even more startling, only 16% say they’re doing fine and have no worries about keeping their businesses alive through the rest of this very unstable period.
These findings emerged after conducting the Alignable Small Business Confidence Poll last week (March 13-17, 2021) among 5,306 small business owners.
Reasons for extended pessimism
Examining the comments from small business owners taking the poll, along with supporting statistics from other recent surveys, it’s clear to see why small business confidence around a robust, rapid recovery remains low.
First, this data helps to paint a more complete picture that shows some economic milestones are getting worse, not better:
- 41% of SMBs have a month or less of cash reserves left (up from 32% last month)
- 49% of SMBs couldn’t pay March rent in full, on time (up from 38% in February)
- 74% of small business owners are struggling to receive PPP funds (though 26% say the PPP has been fast and easy).
These three data points demonstrate why small businesses remain worried. But the situation becomes even clearer examining just a few polltaker quotes:
“The PPP loan is hard to get. We’re SO FRUSTRATED! We train first responders and may not make it!”
“Our medical business likely will not survive if COVID persists and we continue to be denied for the PPP. Because my employees are 1099, they lose out and we lose out, and so does our business. It’s really frustrating when I am an ER doctor who has worked on the front lines this entire time to help fight COVID, and my American dream of having a business practice is suffering.”
“I am diverting into e-commerce, but obviously it takes a lot of time and a lot of money. And I am not sure I can survive if it doesn’t start producing results soon. I applied for a second PPP loan as soon as it opened, but still I have not received anything.”
“I worked hard for 30 years to make my B&B successful. Now I sit here day after day with maybe one or two people coming in. It is boring and depressing. I want my business back!”
While these statements cut across all demographics polled, even more minorities and women are concerned about staying afloat than their peers.
Majority of minorities and women are even less confident
As demonstrated in this graph, 59% of minorities and 50% of women who own small businesses are afraid their shops, offices, or online portals will run out of cash and be forced to close forever before they can put the COVID Era behind them.
Forty-four percent of veteran-owned businesses are at risk, as well. Small business life isn’t exactly thriving these days for other demographics, but business owned by men and or non-minorities are not as negatively impacted as those owned by minorities or women.
Looking into the confidence levels of small businesses in different industries, the patterns for many of them continue to show low confidence in a recovery in the near future. In some cases, they’re even less optimistic than minorities or women who were polled.
Reviewing the chart below, nearly two-thirds of the owners at beauty salons/barber shops (63%), catering operations (63%), or photography studios (60%) feel that they are at risk, especially if they don’t receive the PPP funds they need.
Entertainers (56%), gym owners (54%), restaurant/bar owners (52%), retailers (49%) and those in the travel/lodging sector (47%) aren’t far behind. These numbers are similar to what we found when asking small business owners in these industries about their cash on hand challenges a month ago.
Alignable is an online referral network for small businesses with over 6 million members across North America. It established its research center in early March 2020, to track and report the impact of COVID-19 on small businesses, and to monitor recovery efforts, informing the media, policymakers, and its members.