The COVID-19 pandemic is having a historic impact on the U.S. economy.
To better understand how businesses are weathering this storm, our parent company, UPS, has launched a weekly survey to gauge the “pulse” of small and medium-sized businesses across the country.
The first survey went to 1,200 U.S.-based respondents between March 24 and March 30. More than six in 10 of the responding businesses have fewer than 10 employees — the survey includes responses from all industries.
Initial results show the pandemic is already having far-reaching effects.
Few businesses are immune to the economic impact of coronavirus
When asked how the pandemic affected their business:
- 77% reported either a negative or significantly negative impact.
- Just 6% of respondents said the pandemic affected their business positively.
- Only 7% expected sales to increase as a result of pandemic-related demand.
Another telling response:
- Nearly 70% expected to report a revenue decline in the first quarter of 2020.
- Just 12% of businesses did not expect any change.
Are you one of the SMB owners struggling right now? Find out how the new stimulus package can help your business during this trying time.
Closures and curtailing business
The pandemic has closed or curtailed operations at nearly half of all businesses, according to the survey.
Thirteen percent of respondents reported the closure of business operations, while 35% of businesses pointed to reduced hours or capacity.
The other half of respondents reported normal business operations, with just a small portion (2%) adding hours or increasing capacity.
When asked how they anticipate their business will operate going forward, respondents signaled it will get worse before it gets better.
In 15 days, more businesses expect to reduce their operating hours or capacity. But in 30 days, more businesses expect to reopen, with the number of closures dropping from 13% to 7%.
Preparations for the post-COVID environment — such as marketing plans, employee training and customer outreach — reflect cautious optimism among the respondents.
For more trends, see the results of surveys from Consumer Brands.
While challenges abound, most businesses now view them as short-term disruptions.
Respondents classified their challenges as either short-term or long-term issues. They also described major versus minor problems.
A decline in sales was the top short-term challenge, possibly driven in part by manufacturing shutdowns and inventory disruptions, two of the other major issues cited.
Cash flow management was a top short-term and long-term concern, and 35% of businesses have reduced their staffs as a result.
As one respondent noted, “The biggest challenge is uncertainty as to when we will get back to normal.”
UPS will deploy this survey weekly to monitor the evolving impact of the COVID-19 pandemic on small and medium-sized businesses.
Follow updates on UPS Longitudes.
Republished with permission, this article was original written by Chris Byrne on April 3, 2020.