Major Retail Stores And Longtime Local Businesses Alike Have Not Been Able To Navigate The Coronavirus Pandemic
NEW JERSEY A retail apocalypse that was already hitting New Jersey hard accelerated in 2020 amid the coronavirus pandemic.
And as the pandemic dragged on, many were forced to close their doors entirely even as Gov. Phil Murphy restarted the economy following the March shutdowns while other businesses were able to weather the storm.
The federal government’s contribution of more than $2.4 billion to businesses in New Jersey all part of the CARES Act in March did little to save many businesses that had already fallen on hard times.
Los Angeles Loses Most Small Businesses In The Us Since Pandemic Began
A recent Yelp economic report listed Los Angeles as the U.S. city with the most business closures since the pandemic started. The report revealed there have been 15,000 business closures across Los Angeles County, with half of those expected to be permanent.;
The CEO of the L.A. Economic Development Corporation, Bill Allen, tells Inside the Issues why Southern California is a hotspot for small business losses.
What You Need To Know
- Los Angeles was listed as the U.S. city with the most business closures since the start of the pandemic
- Yelp reported 15,000 business closures across Los Angeles County
- Businesses hit the hardest by the pandemic were restaurants, retail stores, bars, beauty salons and gym
- The CEO of the L.A. Economic Development Corporation says LAâs high amount of personal service businesses led to greater losses
âWe tend to have more small businesses, customer-facing, personal services businesses,â Allen said. âThey all are person-to-person interactions and so they have been devastated by the restrictions placed on them to slow the spread of the virus.â
Businesses hit the hardest by the pandemic were restaurants, retail stores, bars, beauty salons and gyms. Allens points out ownership and business size greatly impacted how long businesses were able to stay open after stay-at-home orders were put in place.
Personal service businesses also struggled to adapt during the pandemic.
Covid Reality Bites: Business Closures Spike 130pc
Businesses that have held on through months of Covid-19 disruption are starting to fold as pressure mounts with no clear end in sight.
For many months, New Zealand has been operating in an environment in which fewer businesses than normal had closed from October 2019 to October 2020, the net number of businesses increased by 4.7 per cent.
The credit was given to the wage subsidy, which gave a cash boost to those that might have otherwise closed for reasons unrelated to Covid-19.
But new data shows that all started to change at the end of last year.
Justin Lester, government director at Dot Loves Data, said business resilience was now being tested.
In September through to November last year, 16,234 businesses closed permanently, compared to 7154 in the same period in 2019. That is an increase of 127 per cent. It is still down from the peak of 20,853 business closures due to the global financial crisis. That level was reached in July to September 2011, three years after the initial impact of the downturn.
The number of new businesses opening last September to November was up 8 per cent to 19,906.
There have been more liquidations compared with any other time in the last five years, but were not yet close to the peaks reached between 2008 and 2011 during the aftermath of the GFC.
Lester said it took a while before people got to the point of closing a business or liquidating.
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Government And Consumer Support Make
Toronto, July 29, 2020 One in seven small businesses are at risk of going under as a result of COVID-19 in addition to the ones that have already closed, warns the Canadian Federation of Independent Business in a new report featured on its Small Business Recovery Dashboard, part of its #SmallBusinessEveryDay campaign. CFIBs mid-range estimate for business closures due to COVID-19 is 158,000 . Depending on how the recovery goes, losses could be as few as 55,000 or as many as 218,000 .;;Small businesses are big players in our economy, so minimizing business losses is critical to recovery. Right now both government support and consumer behaviour are critical to transitioning back to conditions that allow businesses to survive and thrive, said Laura Jones, Executive Vice-President at CFIB.
Businesses in the arts and recreation and hospitality sectors are most at riskhospitality may see 27 per cent of businesses close and arts and recreation, 30 per cent. Businesses in Alberta face the highest risk of closing, with a mid-range estimate of 19 per cent going under as a result of COVID-19.
CFIBs latest Small Business Recovery Dashboard results continue to show that :;62 per cent of small businesses are fully open;37 per cent are fully staffed;26 per cent are making normal sales
Read CFIBs full research snapshot for more details.
For media enquiries or interviews, please contact:Wissal El Alaoui, CFIB
Percent Of Illinois Small Businesses Have Closed Due To Covid
More small businesses have closed in Illinois than in any other Midwestern state, except Michigan
CHICAGO, Ill. – Small businesses have been badly damaged in Illinois in the year since state-mandated COVID-19 mitigation protocols took effect across the state.
35 percent of small businesses are closed now compared to before the pandemic, according to data collected from the Opportunity Insights Economic Tracker, a project of Harvard University. Analysis from thenonpartisan Illinois Policy Institute using this data found more small businesses have closed in Illinois than in any other Midwestern state, except Michigan. Illinois massive decline in the number of small businesses ranks eighth worst in the nation.
- 50 percent of small businesses in the food services and accommodations industry and 51% of small businesses in the leisure and hospitality industry have closed, compared to before the pandemic. These were the most affected sectors in Illinois.
- Nearly 38 percent of Illinois small businesses in the educational and health services industry are still closed, the sixth most in the nation.
- Over 30 percent of small businesses in the transportation industry are still closed in Illinois, the eighth-most in the nation.
- Nearly 34 percent of small retail businesses have closed, eighth-most in the nation.
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Survey Design And Details
Our survey was sent out in partnership with Alignable, a network-based platform focused on the small business ecosystem. Alignable enables businesses to share knowledge and interact with one another, and currently has a network of 4.6 million small businesses across North America. Much of the network growth has been organic, with little outside marketing.
Alignable also regularly sends out polls to users. At the end of a regular pulse poll, participants who took that poll received an email inviting them to participate in a more comprehensive survey being conducted by researchers at Harvard Business School. Participants were shown a disclosure statement and consent protocol. No payments were offered; participation was completely voluntary. The survey was approved by the Harvard University Institutional Review Board.
We received 7,511 responses between March 27 and April 4; 5,843 of these can be traced back to US-based businesses, which is the relevant sample for understanding policy. While the 7,511 responses represent a small fraction of Alignables total membership, they represent a much larger share of Alignables membership that has engaged with their weekly pulse surveys on COVID-19. Alignable estimates that 50,000 to 70,000 members are taking these pulse surveys weekly, which suggests a 10 to 15% conversion rate of these more active respondents.
Million Us Small Businesses Fear They Won’t Survive Pandemic
Three out of every 10 small businesses in the U.S. say they likely won’t survive 2021 without additional government assistance during the coronavirus pandemic, a survey from the Federal Reserve Bank shows. Considering there are roughly 30 million small businesses in the U.S., that means 9 million small firms are at risk of closing for good this year.
The outlook is even worse for minority-owned businesses: 8 in 10 said their company is in poor financial condition, according to the Fed survey, even after receiving limited help from Paycheck Protection Program loans and other small business relief efforts during the pandemic.
Sam Myers, operations manager for Black-owned moving company Dillard Movers of St. Paul, Minnesota, described 2020 as a difficult year for the business and said that 2021 is shaping up to be the same.
“We were at the brink of caving in and going out to find full-time jobs,” Myers said, referring to herself and her co-owner, James Dillard.
Myers said Dillard Movers’ struggles began last March, when the pandemic hit with a fury just as the busy season for movers was slated to begin. Orders began to pick up again in June, Myers noted, but “three months is a long time to go without income, and the bills kept coming in.”;
“Small business debt mounted and business owners plowed their personal savings into their firms to keep them afloat,” the researchers said.
Lockdown Forced Nearly Half Of Small Businesses In South Africa To Close: Study
Financial services company Finfind has published a new report showing how Small, Medium and Micro Enterprises bore the brunt of the countrys coronavirus lockdown.
The study, which was published in collaboration with the Department of Small Business Development and a number of business groups, is based on a survey of 1,489 businesses across every major sector.
The data shows that in the first five months of lockdown, 76.2% of businesses surveyed experienced a significant decrease in revenue.
35.2% had cash reserves saved, and of these, 62.6% thought their cash reserves would last between one and three months. However, only 29.2% of businesses were confident they could pay expenses the following month.
Existing debt, lack of cash reserves, outdated financials, no access to relief funding, and an inability to operate during the lockdown, forced the closure of 42.7% of small businesses.
Surprisingly, only 47.9% of businesses that closed had applied for Covid-19 relief funding. However, virtually all of these funding applications were rejected, Finfind said.
While the outlook for the future is largely uncertain for SMMEs, 76.7% of the business owners who were able to remain open, are optimistic about being able to survive in 2021.
Only 32%, however, believe that they will be able to create new jobs a significant alarm bell during an unprecedented unemployment crisis, Finfind said.
Nearly Half A Million Closures
There were more than 1 million black-owned businesses in the U.S. at the beginning of February, according to;research;from the University of California at Santa Cruz, which drew from Census survey estimates. By mid-April, 440,000 black business owners had shuttered their company for good a 41% plunge. By comparison, 17% of white-owned businesses closed during the same period, the UC Santa Cruz research shows.
Several factors explain the high rate of closures of black-owned businesses. Perhaps most important, many lack access to bank credit, making it harder to survive financial emergencies. Many are micro-enterprises, providing a livelihood to a sole proprietor or a few employees at most. Profit margins are thin, while owners’ financial savings are often meager, making them vulnerable to sudden downturns.
Surveys also show that the vast majority of black business owners who applied for emergency relief after the virus struck through the Paycheck Protection Program were denied a loan. Selmon said she applied for a $50,000 PPP loan shortly after the program was launched, but the funds were exhausted before her loan could be approved. An analysis by the;Center for Responsible Lending;found that 95% of black-owned business were shut out of the small business initiative.;
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% Of Small Businesses Could Face Permanent Closure From Coronavirus Delta Surge
With the rapid rise of the COVID-19 delta variant, U.S. government and public health officials have proposed a variety of methods to stop the spread of the virus, including reinstating mask mandates, pushing to increase vaccination rates and even a new round of shutdowns.
This last option reclosing public spaces also poses a major challenge to many small businesses. According to a new survey from small-business resource review site Digital.com, 57% of small businesses expect to close permanently if more shutdowns take place.
And although in-person businesses are more likely to face permanent closure , the move could also affect a significant amount of online businesses , the survey found.
The Global State Of Small Business During Covid
;While the coronavirus can infect anyone, its impact will certainly not be the same for everyone. Experience from previous epidemics suggests that COVID-19 will impact groups who are most vulnerable and amplify any existing inequalities. The results of a recent global survey of entrepreneurs reinforces this insight, shedding light on some of the gender disparities in the impact of COVID-19.;
The survey was conducted from May 28th to 31st 2020, collecting observations from approximately 26,000 business owners and managers in over 50 countries with an active Facebook Business Page. To provide timely information for policymakers in responding to COVID-19, the Future of Business survey is being conducted on a monthly basis, aiming to assess micro, small and medium enterprises experiences during the pandemic.
Global MSME Business Closure Rates
The heat map below shows the percentage of businesses sampled that were temporarily closed within a country at the time of the survey. Globally, 26% of businesses were non-operational during the survey period, although there was significant variation at the regional and country level. .;;
Gender Gap in Business Closure Rates
In terms of the gender gap, globally, we find female-owned businesses were 5.9 percentage points more likely to have closed their businesses than male-owned businesses, taking into account regional attributes. ;
;Q4 = strictest lockdown policies in place during the survey period
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Number Of Business Owners
I first examine small business ownership patterns over time to determine the impacts of COVID19. Longterm trends in the number of business owners are displayed in Figure; . The number of business owners actively working any amount is displayed in Figure;. Over the past two decades, the number of active business owners in the United States has shown a relatively smooth pattern over time with a slight upward trend. What is clear, however, is the dramatic drop in the number of active business owners in April 2020 and the partial rebound in May and continuing rebound in June. The number of working business owners dropped from 15.0 million in February 2020 to 11.7 million in April 2020 because of COVID19. March 2020 only shows a small drop in business owners likely because of the limited effect from shelterinplace restrictions. May 2020 shows a partial rebound from April 2020 adding back 1.1 million active business owners . The losses due to COVID19 from February remain high at 15%, but the rebound suggests that not all of the losses of active business owners in April 2020 were permanent closures. June experienced a further rebound with business activity being down 8% from February levels.
Number of active business owners in the United States
Beis Estimates That 168 Million People Work In Smaller Firms Across The Uk
The proportion of small businesses forecasting a reduction in profitability for the coming quarter has spiralled over the past year, rising from 38 to 58 percent. The figure is at an all-time high. Almost half of exporters expect international sales to drop this quarter, up from 33 percentat this time last year.
FSB National Chairman Mike Cherry said: The development of business support measures has not kept pace with intensifying restrictions. As a result, we risk losing hundreds of thousands of great, ultimately viable small businesses this year, at huge cost to local communities and individual livelihoods. A record number say they plan to close over the next 12 months, and they were saying that even before news of the latest lockdown came through.
At the outset of the first national lockdown, the UK Government was bold. The support mechanisms put in place werent perfect, but they were an exceptionally good starting point. Thats why its so disappointing that its met this second lockdown with a whimper.
We also have to look again at how we treat emergency debt facilities over the coming months. Many of those who have borrowed significantly have done so in order to innovate. It would be a shame to lose the top businesses of tomorrow because of a failure to extend grace periods today.
Pre-Covid figures show fashion is the UKs largest creative industry, worth 26 billion pounds and 800,000 jobs to the economy.
Image via Pexels
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Firm Characteristics And Representativeness
The survey contains three baseline questions which enable us to assess the representativeness of the sample along observable dimensions: number of employees, typical expenses , and share of expenses that go toward payroll. We are also able to get rough information about geolocation to assess representativeness by state.
We compare our data with data on businesses from the 2017 Census of US Businesses, using the publicly available statistics published by the US Census Bureau. The underlying data are drawn from the County Business Patterns sampling frame and cover establishments with paid employees, including sole proprietorships if the owner receives a W2. The Census data capture large and small businesses alike, but, for our comparisons, we will look only at businesses with fewer than 500 employees.
The Alignable network allows users to share customer leads, which could potentially skew our sample toward retail and service businesses that interact directly with consumers. Since retail businesses are particularly vulnerable to COVID-19 disruptions, our sample could overstate the aggregate dislocation created by the crisis. Naturally, industries dominated by large firms, such as manufacturing, are underrepresented. However, as we discuss later, our data on the industry mix of responses suggest that the sample represents a wide swath of Americas smaller businesses.