Over nine weeks between April 26 and June 27, 2020, the United States Census Bureau conducted a weekly survey of small business owners to measure changes in business conditions during the COVID-19 pandemic.
The goal of the first phase of this weekly survey was to collect detailed information regarding small business-specific initiatives such as the Paycheck Protection Program (PPP), as well as data relating to:
- Current business status—Have there been changes in revenue? How much cash on hand is available? Were any loan or other payments missed?
- Location closures—Were any locations temporarily closed?
- Changes in employment—Were there any changes in the number of employees or hours worked?
- Use of federal assistance programs—How many businesses applied for federal assistance or funding from other sources? How many businesses received funding from these sources?
- Expectations for future operations—How long will it take for business operations to return to normal?
The survey also addressed disruptions in supply chain, changes to business operations, and shifts to other goods and services.
We’ve reviewed the data and created a series of fact sheets to help you understand the state of small business in the United States over the course of the pandemic.
Here’s what we learned:
1. Yes, a lot of businesses were negatively impacted by the COVID-19 pandemic
It will come as no surprise that the majority of businesses were negatively impacted by the COVID-19 pandemic, with 85.5% of businesses experiencing a moderate or large negative impact and 55.2% of businesses reporting decreased revenue.
While a significant number of businesses—74% of those surveyed—experienced a decline in operating revenue in the first week of the survey, revenues stabilized somewhat by the ninth and final week of the survey period, with less than half of businesses surveyed reporting a decrease in revenue and a greater proportion of businesses reporting an increase in revenue. Similarly, the overall negative impact decreased from 51.4% in the first week to 37.7% in the final week of the survey.
2. It’s not actually as bad as you may have feared
Despite the widely reported overall negative impact, the state of small businesses across the nation might not be as dire as feared—71.5% of businesses did not experience a temporary closure over the survey period, 75.6% did not experience a change in number of employees, and 57.7% did not experience a change in employee hours.
The situation is also improving—41.4% of businesses reported a temporary closure in the first week of the survey compared to just 17.9% in the ninth week. Similarly, 27.5% reported a decrease in employees and 51.2% reported a decrease in employee hours in the first week, compared to 11.7% and 22.2% in the final week.
3. Most businesses have maintained cash flow through the pandemic
Over half of businesses surveyed—52.3%—had enough cash on hand (including financing and loans) to cover more than one month of expenses, while less than 10% had enough cash on hand to cover 1-7 business days or had no cash on hand at all. In addition, 93% of businesses surveyed did not miss loan payments, and another 83% did not miss other payments like rent, utilities, or payroll.
4. The most popular funding program is the Paycheck Protection Program
74.9% of businesses surveyed applied for Paycheck Protection Program funding, followed by Economic Injury Disaster Loans with 28.4% of businesses surveyed applying for these loans. PPP applications remained relatively stable over the course of the 9 week survey period, with a slight increase from 74.9% in the first week to 75.4% in the final week. 17.8% of businesses surveyed did not request funding from any source.
65.3% of businesses received PPP funding over the course of the survey period, with a significant increase in businesses receiving PPP funding by the end of the 9 week period—less than 40% received PPP funding in the first week, compared to 72.4% in the final week. In comparison, 17% received an EIDL during the 9 week survey period.
5. Businesses owners don’t expect things to return to normal any time soon
Business owners have a cautiously optimistic outlook—62.4% of business owners expect it will take 4 months or longer to return to their normal level of operations relative to one year ago, while less than 10% expect their business will never return to its normal level of operations.
The overall outlook also changed over the course of the survey period. In the first week, 31.4% of respondents believed it would take longer than 6 months to return to normal operations, compared to 43.9% in the 9th week. However, a greater number of businesses reported that there was little or no effect on their normal level of operations in the 9th week—12.4% compared to 6.7% in the first week.
Between purchasing personal protective equipment for employees, implementing new cleaning and sanitation protocols, and adjusting product or service offerings, operational costs have increased as a result of the pandemic for many businesses. Federal programs and other funding options are available to help businesses navigate these changes, but not all businesses have been able to access funding through these sources. Get our advice for what to do if you didn’t get approved for federal funding, or what to do if you’ve run out of federal funding.