We all know from personal experience and the news that COVID-19, also known as coronavirus, is having a devastating effect on small and medium businesses (SMBs)—the engine of the U.S. economy and those around the world.
But how deep and broad is the impact? SMB Group sought to answer that question in a survey of more than 500 SMB (1-1,000 employee businesses) and midmarket (1,000-2,500 employee businesses) decision-makers and influencers. The survey was fielded from March 23 through March 30, 2020—very important to note as the trajectory of the virus is constantly changing.
We want to sincerely thank those of you who took the survey for doing so. We’re also grateful to our sponsor partners: Acumatica, Dynata, Sage Intacct, Workday and Smart Hustle.
SMB Group is developing an eBook with key findings and perspectives from the study and hope to have it ready next week. If you’d like a free copy, simply click here and we’ll send you one.
In the meantime, we wanted to share a few preliminary results with you below:
- A staggering 75% of all SMBs report that COVID-19 is negatively impacting their businesses. Nineteen percent have not experienced a negative effect to date, and 6% are not sure.
- Almost two-thirds of SMBs believe revenues will drop by 30% or more over the next six months.
- Businesses across all industries are suffering due to COVID-19. However, the depth of this impact varies by industry. Personal services, hospitality and manufacturing are taking the biggest hits, with 90% or more of businesses in these sectors reporting a negative impact.
- Businesses with fewer than 20 employees are most likely to experience extremely negative impact; 38% of businesses in this size band say that COVID-19 is having an extremely negative impact on their businesses.
- More than half of SMBs have already or are planning to lay off salaried employees, and/or reduce their hours.
- SMBs are looking to preserve precious capital and cashflow by slashing spending on non-employee goods and services by an average of 37%. However, plans to defer, reduce, eliminate or maintain spending vary considerably among the seven expense categories we asked respondents about.
This is just a small sample of the study’s findings. The full picture, which we’ll provide in the free eBook, will provide more detail about these areas and delve into:
- How SMBs are changing, postponing or canceling physical world meetings, appointments and events in the wake of the coronavirus.
- The extent to which SMBs are expanding online sales channels, and whether or not these efforts are helping them increase sales.
- The degree to which SMBs are expanding or establishing telecommuting options to enable employees to work from home.
- Which online solutions SMBs are using to help sustain their businesses through the crisis, and how valuable these different solutions have been to date.
- SMB views on the value of different government programs in helping them to successfully weather the COVID-19 virus.
Laurie McCabe is a co-founder and analyst at SMB Group, specializing in small-business IT. ©SMB Group 2020