To say that COVID-19 and the ongoing Coronavirus pandemic have changed both our personal and professional lives is, at this point, likely a dramatic understatement.
According to one recent study, there were more than five million confirmed Coronavirus cases around the world as of May 20, 2020. Over 1.57 million of those cases were in the United States. Despite the fact that at least 40 states had significantly eased stay-at-home orders as of the third week of May, millions of Americans were still under quarantine - posing a major problem for SMB owners in particular.
Everyone already knew that the millions of small businesses in this country had long made up the backbone of the United States economy. Now, another recent report sheds some invaluable light on how dire the current situation is, and where things may be headed moving forward.
According to the Facebook & Small Business Roundtable State of Small Business Report, things haven't just gotten "bad" over the last few weeks and months. They've been nearly catastrophic in a lot of cases.
Just a few of the key findings of the report include:
Breaking down those statistics one-by-one shows just what a striking impact COVID-19 has had on the entire country. There are approximately 30.2 million small businesses in the United States, for example, so the fact that 31% are still not opened equates to about 9.7 million organizations.
The cashflow statistic is equally harrowing, as this has long been the cause (or at least one of them) for the vast majority of small business failures up to this point. The fact that so many small business owners are currently concerned about this major challenge getting even worse does not paint an optimistic picture about what may happen in the days and weeks ahead.
The report touched a few different times on the idea that a lot of businesses have stepped up their online presence during a time when many of them weren't legally allowed to open to the public. This is good news for those who had that option and indeed, consumers can generally expect this trend to stay around long after the last stay-at-home order has been lifted.
But not every small business has that luxury, and restaurant owners in particular have had a more difficult time than most. Many of them have quickly taken to online ordering and curbside pickup options, but again - that isn't necessarily something that smaller organizations in particular can easily do.
The last point definitely sheds light on where things may be headed after COVID-19 has finally subsided. Over half of all respondents said that they were likely not going to rehire the same workers when their businesses officially reopened, either because they no longer had the means to do so, or those employees would no longer be needed.
Coronavirus has certainly required some businesses to pivot, often in dramatic ways that they never could have anticipated up to this point. It seems that a lot of those businesses are expecting those pivots to be permanent. Meaning, of course, that the small businesses they return to over the course of the summer will barely resemble the ones they left when all of this began at the beginning of March.
According to a report from CNBC that was first published in the middle of April, approximately 7.5 million small businesses are at the risk of permanently closing thanks to the impact that Coronavirus has already had. More than 90% of the business owners who responded to the poll included as part of the report had fewer than 20 employees. Even if they only had an average of 10 employees among them, that's still 75 million people across the country out of work.
All of this is to say that while nobody truly knows with certainty how things will play out once Coronavirus has finally left us all behind, it's going to be an uphill battle for a lot of small business owners moving forward. But the most important thing is to remain as optimistic as possible, regardless of how difficult that may be. We went through the COVID-19 pandemic together and we'll get through the aftermath together, too. It's just that the exact path we'll take to get to that point currently remains to be seen.
About Frank Jenkins Jr
Frank Jenkins Jr. CPA is the managing partner of Adams, Jenkins & Cheatham, a CPA practice based in Midlothian, VA. Frank specializes in Consulting services, tax planning, audit & assurances. "I genuinely care about our clients because I have a personal connection with them." He is active in the community and belongs to the AICPA and the VSCPA.
