Small and midsize U.S. businesses are bearing "a disproportionate impact from the COVID-19 pandemic," according to a report from business services firm CBIZ Inc. (NYSE: CBZ) of Independence.
CBIZ said in a news release issued on Thursday, Oct. 8, that 43% of businesses surveyed for the CBIZ Main Street Index reported "a significant to severe impact" on their operations from the pandemic. The index found the vast majority — 84% — of businesses surveyed "realized some impact from the pandemic and corresponding economic slowdown." Hardest hit were the smallest businesses, those with fewer than five employees, CBIZ reported.
The company said it analyzed responses from more than 1,600 businesses nationwide, representing more than 30 industries. The data were collected between Aug. 25 and Sept. 15. The index's survey "assessed a range of issues and challenges, including the pandemic's impact on business health, sales and revenues, and staffing and headcount, as well as participation in the Paycheck Protection Program (PPP) and anticipated challenges moving ahead," according to the release.
Philip Noftsinger, executive vice president of CBIZ, said in a statement, "While we have known small businesses were impacted by the pandemic, the index begins to quantify the uncertainty around this sector." He said the pandemic "touched nearly all industries across the small and midsize business space" and noted that federal relief programs "have proven critical as the sector continues to respond."
Among other findings, according to CBIZ:
• 51% of respondents "reported a significant decrease in sales due to the pandemic." More than 17% "said they are seeking extensions on recurring payments like rent, and less than 60% of these businesses have been granted such extensions." CBIZ said there were notable geographic differences, "as businesses in the West experienced a more dramatic impact, with those in the Midwest seeing less of an impact."
• 22% of respondents "indicated a shift in business valuation due to the pandemic." In the immediate term, 68% of respondents "indicated concerns around revenue loss, while 32% were concerned about a prolonged sales cycle."
• Nearly 48% of businesses with one to four employees have experienced "a significant or severe impact." For businesses with 20-49 employees, 37% reported a significant or severe impact.
• Businesses in the accommodations/food services, arts/entertainment, educational services and transportation sectors were among the hardest hit, while those in professional services, insurance, financial services and construction were among the least impacted.
• 27% of small to midsize businesses "indicated they would be reducing staff in the next six months, and 17% believe they may need to apply for additional loans and outside funding." Still, more than 40% plan "to increase marketing spending," and nearly 20% say they will grow their workforce.
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October 09, 2020 at 12:42AM
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CBIZ report: Small businesses are feeling the largest impact from the pandemic - Crain's Cleveland Business
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