Survey: Half of small businesses could close within 6 months due to virus

A new survey from the Society for Human Resource Management found that 52% of owners do not expect their small businesses to survive through November

May 11, 2020 01:22 PM

A “closed” sign hangs in the window of St. Matthew’s Thrift Shop along Main Street in Santa Monica, Calif., on May 7, 2020. Image: Genaro Molina/Los Angeles Times/TNS

The News & Observer
By Simone Jasper

Coronavirus could close half of U.S. small businesses within six months, a new survey finds.

Fifty-two percent of owners say they don’t expect their small businesses to make it into November, according to findings released Wednesday from the Society for Human Resource Management.

The results come after a WalletHub survey last month found one-third of small businesses expected to shut their doors within three months.

Normally, 80% of new businesses stay open past the first year, and half stick around for five years or more, according to data gathered by the U.S. Small Business Administration.

States have put restrictions on restaurants, salons and retailers to help slow the spread of the coronavirus, leading to layoffs and furloughs for workers. The unemployment rate in the U.S. was 14.7% in April, according to the Department of Labor, The New York Times reported Friday.

Among small businesses, 54% of owners reported layoffs and 22% reported furloughs at their businesses due to the coronavirus, according to the Society for Human Resource Management.

The organization says it partnered with Pure Spectrum for the survey to gather responses from 375 people between April 15 and April 21.

In a separate coronavirus survey, three-fourths of small business owners, founders and managers say they plan to “let go of at least one employee,” according to ZenBusiness, a company for entrepreneurs that conducted a survey of 1,074 people from April 25 to April 27.

To give a hand to small businesses, the U.S. government has loan programs for those facing impacts from COVID-19.

Roughly 75% of people in charge of small businesses think relief from the federal government will help them, while the rest don’t expect it to at all, ZenBusiness’ survey results published April 29 show.

In the other survey, 56% of owners said the government’s Paycheck Protection Program would give a boost to their businesses, but more than 40% say the loans “will likely arrive too late or has already arrived too late” to help them.

Though most owners say the coronavirus has cost them revenue, a majority expect to recover within 6 months of the end of the outbreak, results from the two recent surveys show.