(The Center Square) – A Florida State University survey of 567 small businesses and nonprofit organizations found 15.2 percent – or about 86 – will not reopen after being shut down by the response to COVID-19.
The May survey, funded by the Jim Moran Institute for Global Entrepreneurship in FSU’s College of Business, found 14.5 percent of businesses closed temporarily during emergency shutdowns, 31 percent are now operating below 40 percent capacity and nearly 40 percent are operating at 40 percent capacity or higher.
“Small businesses and nonprofits have taken a huge hit during this time, with nearly 30 percent of our sample needing to close temporarily or permanently as of early May,” FSU Assistant Professor of Management Samantha Paustian-Underdahl said. “The good news is that most organizations are getting some help.”
According to FSU, 92 percent of businesses surveyed said they have received some type of financial assistance, 46.7 percent said they laid off employees during COVID-19 shutdowns and 51 percent reported they did not. The average number of employees laid off was 10.5.
“Florida seems to be faring better than other parts of the country, as only 10 percent of the 137 Florida businesses in our sample have temporarily or permanently closed, and only 32 percent have laid off any employees,” Paustian-Underdahl said.
The U.S. Small Business Administration (SBA) defines “small business” by number of employees and average annual receipts. Depending on the industry, a small business could have up to 1,500 employees.
According to SBA’s 2018 Small Business Profile, 99.9 percent of U.S. businesses are small businesses, with nearly 50 percent of workers, or 58.9 million Americans, employed by small businesses.
According to the Florida Small Business Development Center (SBDC), the state’s 2.5 million small businesses annually create nearly three of four new jobs, employ more than 40 percent of the state’s private sector workforce and contribute nearly 44 percent of the state’s $1 trillion GDP.
There are 3.4 million Floridians employed by small businesses, which include 556,089 that employ 20 or fewer people, SBDC reported.
With Florida projected to add 4 million more residents by 2030, SBDC forecasts the growth would foster the founding of 500,000 new small businesses that would create 1.2 million jobs.
The lingering effects of the COVID-19 emergency and its economic fallout, however, could chill anticipated small business growth, researchers warned.
In an April CNBC Small Business Survey of 2,200 small business owners across the U.S., 13 percent said they could survive less than a month in an extended period of lockdown; 31 percent said their business would last “a few months or less,” and 35 percent said their business could survive more than a year.
In a Chamber of Commerce/MetLife survey of 500 businesses, also in April, 43 percent said they would have to permanently close within six months without government assistance or improved economic conditions; 46 percent said the economy would need between six months and a year to be restored.
FSU’s survey asked participants to provide feedback on employee layoffs, government loan programs, operating capacity and stress levels, among other factors, to measure how businesses have changed daily operations during the coronavirus emergency.
Businesses were surveyed about applying for and receiving funds from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL).
Of respondents, 75.5 percent applied for one or both, with 28.9 percent receiving only PPP, 26.8 percent receiving only EIDL, 11.3 percent receiving both and 8.3 percent receiving neither.