May 12, 2020
San Francisco-based Veem recently surveyed 690 small businesses and their findings are concerning. . Widespread shutdowns aimed at containing the spread of COVID-19 have disrupted the U.S economy in ways not seen since the Great Depression. A major worry is whether small businesses that make up such a sizable portion of the economy can survive. While some companies struggle to survive, others have benefitted from their business being deemed essential or working online. To make matters more difficult, critical supply issues move to the forefront of small business’ concerns to address as states begin to reopen. More than half of the surveyed companies report moderate to high supply-chain disruptions as a result of factory shutdowns, border restrictions and industry-wide furloughs. In an attempt to work through this, more than one third said they are now setting up regional supply chains.
They found that 81% of small businesses see the Coronavirus effect lasting 12-16 months. 90% are bracing for an economic slowdown. Nearly 70% of the companies surveyed cited some uncertainty about the U.S. economy in 2020. 55% said they had already experienced some significant impact to revenue. About 30% of the companies were more optimistic, suggesting that some industries such as online retailers and other e-commerce businesses were better positioned to thrive in the current environment. Nearly one-quarter of the companies were investing in new technology or aligning their information technology systems. Nearly 65% of the businesses said that they had or were planning to apply for federal aid. An economic contraction of this scope can make access to working capital more difficult than prior to COVID-19.
Liquidity remained a “key pain point,” the survey showed, with 52% of companies cutting operational costs and 59% applying for loans, the survey showed. Only 13% said they had not taken any measures to prepare for a slowdown. Nearly 54% of the companies said they were freezing hiring and 23% were downsizing staff, but nearly 18% said they planned to increase staff training and support.
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