New Survey Shows More Than 40% of Small Businesses May Close by Q4
Sixty percent of small firms are still reporting negative financial impact with nearly half of that group saying it is significant,
A new survey found more than 40% of small companies might be forced to close for good at the end of the fourth quarter, according to the Alignable Pulse Poll of more than 6,300 small business owners.
The survey, conducted from Sept. 18-21, asked how much revenue small business owners expect to earn in Q4 and how much they need to stay in business. Combining those answers, 42% of small businesses said they might be forced to close for good before 2021.
What’s more, 45% of retailers and 38% of B2B firms could shut down by the end of the fourth quarter, according to the Boston-based Alignable, an online network of more than five million small business owners across 30,000 communities in North America.
When the COVID-19 crisis hit the U.S. in March, Alignable began tracking the state of the small business economy every week. Over the last six months, 60% of small firms are still reporting negative financial impact with nearly half of that group saying it is significant.
“We also asked B2B owners the percentage of their clients that could close their doors by the end of 2020. Of that group, 20% expect more than half of their clients might shutter. And an additional 26% estimated that 25% to 50% of their clients were at risk,” Chuck Casto,
Alignable’s head of communications, said. “This clearly illustrates the underlying pressures facing B2B businesses, because if too many of their clients shut down, their businesses will be in serious jeopardy if they don’t find new business quickly.”
The B2B firms are those that serve the industries of finance, agriculture, marketing, and manufacturing.
When it comes to another round of federal relief funds, Alignable found 72% of businesses experiencing negative financial impact would apply. However, 37% of that group said they would only apply if the terms provided greater flexibility around using the money.
“What we found most alarming was 47% of those who reported that COVID-19 had a positive impact on their businesses would still apply for additional relief funding, if given the chance,” Casto said. “Clearly, if Washington approves additional funding, the federal government should thoroughly identify those businesses actually in need of further relief.”