The lack of adequate small business funding is a source of great anxiety for small business owners.
Following the closures of most businesses, coupled with strict social distancing measures enforced during the COVID-19 outbreak, there does seem to be an “easing up” on regulations, allowing for businesses to slowly resume operations.
However, a recent survey conducted by LendingTree revealed a crippled confidence among business owners. According to the data, 46% of small business owners mentioned that funding was the number one hindrance that is keeping them from reopening. If they were to open, they would be subjected to strict safety guidelines. One common restriction would be to limit the capacity of customers to 25% to 50%, in addition to social distancing. Under such constraining conditions, many feel that it would be useless to open their doors.
According to one business owner:
“I feel a multitude of emotions. Completely unsure of how my salon will remain open without rents being reduced [and with] less customers. Even if we have the clientele, we have to abide by social distances, which in turn equals less space [and] less customer intake.”
The Key Results
- Nearly 6 in 10 business owners will reopen once granted permission. Only 15% will open later, while 26% are unsure if they will ever reopen.
- It is expected that there will be fewer customers and fewer sales by 46% of business owners. Only 17% believe they will retain the same number of customers and sales prior to the pandemic.
- As soon as stay at home orders are removed, small owners will not reopen their doors due to lack of funds. They are also concerned for the safety of both their employees and themselves.
- An estimated 63% of small business owners have applied for the Paycheck Protection Program. Of those who applied, 44% have received the loans.
- More than half of those PPP recipients are anxious they won’t meet the loan forgiveness criteria. About 24% are “very concerned” while 29% are “a little concerned.”
Small Business Owners Anxious About Reopening
Without question, the pandemic has caused grave damage to the economy and small businesses have beared the brunt of the blow. Many business owners believe that the devastating effects will remain long after the states and government regulations lift restrictions.
The greatest worry for 39% of business owners is that they won’t make enough sales to make reopening worth the effort. With another coronavirus spike predicted, 30% are apprehensive about getting shut down again. A smaller portion of business owners or 8% are concerned that they will not be able to keep up with the social distancing and cleanliness policies. Finally, employees unwilling to go back to work is something that 5% of business owners shared as their main worry.
Luckily, this fear is unwarranted as 52% of respondents said that they expected all their employees to resume work once they are reopened. Almost half, or 48% are expected to bring back on board the same employees for the same number of hours. The survey showed that only 23% of business owners said that they will employ less people to work less hours once they reopen.
Stick To The Basics
Lack of funding is certainly a significant obstacle for many business owners. However, now is the time to trim any unnecessary expenses and focus exclusively on what your business needs to remain open.
Be resourceful with what you have. Don’t aim for full operations at the moment. Be mindful and communicate what you can reasonably offer your staff and your customers. These strategic decisions will help you better ride through this very difficult patch.