A recent industry report found that by April 1, at least 13.9 million small businesses nationwide were at serious risk of closing. Many small businesses have lost major customer bases as a result of the Epidemic.
Small business consortium Alignable said 44 percent of the country’s 31.7 million small businesses were at risk of closing by the end of the first quarter because they were expected to earn less revenue than their owners estimated they would need to make ends meet.
The report shows that “survey respondents’ confidence in their future cash flow is currently low.”
One small business owner surveyed said, “The discretionary cash flow on which our business is based is highly constrained. We need to boost our customers’ confidence to bring them back and give them peace of mind to spend their money.”
Another small business owner said, “My income has dropped to zero.”
Harvard University’s Economic Tracker report shows that as of Feb. 10 of this year, small business revenues are down 33.1 percent compared to January 2020. Between Jan. 1, 2020, and Dec. 31, 2020, about 30 percent of U.S. small businesses fail.
“I run an online editing and writing business and my client base has completely disappeared due to my inability to continue advertising or marketing,” said another survey respondent, “Some clients have chosen to close permanently, while others have reduced their marketing by nearly 100 percent.”
The report is based on a survey of 6,029 small business owners conducted between Jan. 28 and Feb. 15 by Alignable, a small business network comprised of more than 6 million members.
The industry noted that small business closures were more severe in areas such as New York and California, where strict lockdown measures were in place, and some business owners chose to relocate to areas such as Florida, where epidemic precautions were relaxed, or to open local locations to stay afloat.
During the pandemic, large companies dominated the industry, with companies such as Walmart and Amazon generating record revenues in 2020. In the midst of the pandemic, 45 of the 50 most valuable publicly traded companies made profits, despite the U.S. unemployment rate jumping to a record 14.7 percent.
The Wall Street Journal reported that Nike CEO John-Donahoe said on a conference call last September, “These are the times when the strong can get stronger.”
The U.S. economy shrank by 3.5 percent in 2020, the worst performance since the 1940s, according to a Jan. 28 report from the U.S. Bureau of Economic Analysis (BEA). The U.S. poverty rate also hit its highest record since the 1960s, when it soared to 11.8 percent in December.
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