- June 10, 2020 12:00 am
Small businesses have not faced anything like this before. The current economic climate is being compared to the Great Recession of the late 2000s. We wanted to get some accurate information from small businesses themselves to understand the impact COVID-19 is having and how our working lives are being affected.
To do that, we surveyed 1,074 senior managers, decision-makers and founders to understand how their businesses are coping during these challenging times.
Employee layoffs unfortunately come hand-in-hand with periods of economic uncertainty, so it’s unsurprising that our data showed that 75% of SMEs expect to let go of at least one employee due to coronavirus.
Over a quarter of SMEs plan to lay off up to 5 employees, while 14% are expecting to let go over 11 employees. Looking at these businesses by employee size, we can see that those with over 50 employees plan to make the largest layoffs, which is expected. While smaller businesses with fewer than 25 employees are expected to make fewer layoffs, the impact may actually be felt harder.
While that analyzes the human cost of COVID-19, the global pandemic is also going to have vast financial implications for small businesses everywhere. Our data suggests that 1 in 10 (11%) are less optimistic, stating the financial damage of the virus may be in the region of $100k-$250k. From those surveyed, the average business is expecting to lose tens of thousands of dollars, with the majority (31%) estimating the cost to be between $10K and $50K. Only 3% of senior business decision-makers surveyed were fortunate enough to say there would be no impact on their business.
In addition to this question, we also asked businesses if they could provide a further estimate to the COVID-19 damage. Of those that felt they could answer accurately and had financial damage from COVID-19, we received over 700 estimates. According to our business decision-makers, the estimated cost of coronavirus to small businesses sits at just over $64,000.
When analyzing the financial impact of COVID-19 on small businesses, we felt it was important to understand the implications of the government relief bill. Fortunately, the majority of small businesses surveyed (75%) felt that their business will benefit in some way from Trump’s relief bill. When looking at the number of employees, the data suggests that those with fewer employees (2-10) will not benefit from the relief bill as much as businesses with a larger workforce. This comes at a time when it is reported that 7.5million small businesses are at risk of closing due to COVID-19.
Despite this, a quarter of SMEs expect to recover from COVID-19 within 3-6 months. Those businesses with more employees expect the recovery to be longer, with almost a quarter (23%) of those with over 50 employees estimating the recovery to take at least 6-12 months.
When asked how long businesses expected COVID-19 to continue to impact their business, the trend continued, with most businesses (38%) saying 3-6 months. Coupled with a 3-6 month estimate of recovery, most small businesses are expecting to wait a year until the impact of COVID-19 is over and the recovery period finishes.
While we recently asked those working remotely how they felt at this time, we wanted to understand the thinking of key decision makers on remote working and their business.
45.5% of those surveyed stated that they did not have remote workers before the pandemic. According to our data, 70% have at least one employee working from home during this period.
The trend in our data suggests that larger businesses are more inclined to offer remote working, possibly indicating that the smaller businesses may not have adequate systems in place to deal with this large change.
We also took this opportunity to find out if those businesses who were forced into remote working due to coronavirus, would use it after the pandemic. The results showed a systemic trend of adoption across all small businesses.
Businesses who were forced to offer remote working due to COVID-19 made up 55% of our respondents. When we asked these same businesses if they intend to adopt remote working after the pandemic, 62% responded that they would.
Analyzing the data further, the numbers reveal that actually there is an increase of 16% in the businesses who previously offered remote working (45.5%) before and after the pandemic, this is according to the number of respondents to the respective questions. This indicates there may be an unprecedented surge in remote working after the lockdown as many businesses understand its benefits and implementation.
This system change is fairly consistent across small businesses regardless of size. 65% of businesses with over 50 employees have remote working in place currently, and of this group, 70% intend to keep WFH in place in some form once this pandemic is over. 48% of small businesses with fewer than 10 employees put remote working in place during COVID-19 and 57% intend to implement it once the pandemic is over.
ZenBusiness surveyed 1,074 people who were decision-makers at small businesses, the breakdown was as follows:
Those who did not have decision-making responsibilities at their business were excluded from the survey.
The businesses that the respondents managed were sorted by their number of employees and the breakdown of company size was as follows:
Using illustration and/or data from our results above is absolutely fine for commercial or non-commercial use. Any references or use of our assets simply requires a link back to either the ZenBusiness.com homepage or this URL.
Create a Business Today
Get the services and expert support you need to form, run, and grow a successful business!