At least 13.9 million of the nation’s small businesses are at serious risk of shuttering their doors by April 1, a recent industry report found.
Forty-four percent of the country’s 31.7 million small businesses are at risk of closing by the end of the first quarter, according to small business group Alignable. Small businesses on the brink of closure expect to earn less revenue than their owners estimate is needed to stay afloat.
“Customer confidence in their future cash flow is low right now,” a surveyed small business owner said, according to Alignable. “And so discretionary spending, which our business is based on, is significantly restricted. We need customer confidence to elevate to bring them back and make them feel comfortable spending their money.”
“My income has dropped to zero,” another small business owner said.
Many small businesses have already been crushed due to the coronavirus pandemic.
Small business revenue plummeted 33.1% as of Feb. 10 compared to January 2020, according to Harvard University’s Economic Tracker. Between Jan. 1, 2020, and Dec. 31, 2020, about 30% of U.S. small businesses closed.
“I have an online editing and writing business and my customer base is completely gone, due to businesses being unable to continue advertising or marketing,” another survey respondent said. “Some have closed for good, while others cut back their marketing nearly 100%.”
Alignable’s report was based on a survey of 6,029 small business owners between Jan. 28 and Feb. 15. Alignable is a small business network comprised of more than 6 million members.
Meanwhile, companies like Walmart and Amazon were able to generate record revenues in 2020. In the middle of the pandemic 45 out of the 50 most valuable public corporations profited, even as the U.S. unemployment rate jumped to a record 14.7%.
“These are times when the strong can get stronger,” Nike Chief Executive Officer John Donahoe said on a September conference call, The Wall Street Journal reported.
The economy shrank 3.5% in 2020, according to a Jan. 28 Bureau of Economic Analysis (BEA) report, the worst performance since the 1940s. The U.S. also recorded its sharpest rise in poverty since the 1960s when the poverty rate spiked to 11.8% in December.
By Thomas Catenacci