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Last updated August 17th, 2020

Small-business sentiment

As small-business owners and operators contend with the challenges from the COVID-19 pandemic, some have found it helpful to learn from the experiences of others in similar situations. Below you will find a selection of learnings from a recent survey of small-business owners about their experiences during the COVID-19 crisis. The selection of learnings are paired with relevant resources and thought starters, where available, that you may consider to address some of these challenges.

Please note: The below list is not comprehensive, nor is it exhaustive, and it should not be used as a definitive indicator of the sentiment or experiences of all small businesses owners and operators. The survey data is based on a limited number of responses (n=~1,000) from a variety of locations around the United States, and therefore may not reflect accurate information for every location and business type (see here for more information on the survey). The data was last updated on May 13, 2020. Small and medium-size business (SMB) owners and operators should look to local official sources to understand the state of small businesses in their city, county, and state.

1. Small-business owners cited “lack of customers,” “increased business uncertainty,” and “issues with supply chain” as their top challenges

Survey question: “Which of the following challenges do you currently face?”

Source: McKinsey & Company COVID-19 US SMB Financial Pulse Survey, n=1,016, date collected: July 24–29, 2020; includes SMBs < $500M in annual revenue

Small-business owners cited "lower consumer demand" and "government mandated restrictions on capacity" as the biggest impacts to business operations capacity

Survey Question: "What are the primary reasons why your business is operating below capacity?"

Source: McKinsey & Company COVID-19 US SMB Financial Pulse Survey, n=1,016, date collected: July 24–29, 2020; includes SMBs < $500M in annual revenue

Small-business owners and operators around the country are struggling with a variety of challenges brought on by the COVID-19 pandemic and consequent government-mandated stay-at-home orders. While challenges vary by business type, sales channels, location, and other variables, many small-business owners cited the following three as key challenges. See below for resources that may be of help as you navigate the following common issues:

"Lack of customers or do not know when customers will come back" : Survey data indicates that small-business owners are not sure when their customers will come back based on local reopening guidelines.

"Adapting business to remote/digital environment" : Many small-business owners are trying to engage with customers online, though selecting and implementing new digital platforms may offer some challenges.

"Employees do not want to come to work because they do not feel safe" : Small-business owners should start by consulting CDC and local health guidance. Business owners can also consider additional steps to help their employees feel more comfortable coming back to work.

2. Small-business owners surveyed reported that they are cutting back on purchases

Survey question: “Please indicate how strongly you agree or disagree with each of the following statements.”

Source: McKinsey & Company COVID-19 US SMB Financial Pulse Survey, n=1,016, date collected: July 24–29, 2020; includes SMBs < $500M in annual revenue

  • Explore these resources as you think through managing expenses
  • Check back soon for additional relevant resources

3. Small-business owners and operators are rethinking business and personal finances

Expected change in behavior across personal and business banking

15%

Believe balances in existing business/personal bank accounts will decrease

16%

Will apply for new loan accounts/lines or increase amount/balances of existing loan and credit products (excluding cards)

42%

Intend to refinance commercial mortgages or home equity loans

32%

Believe their current cash on hand can last only a month or less

Source: McKinsey & Company COVID-19 US SMB Financial Pulse Survey, n=1,016, date collected: July 24–29, 2020; includes SMBs < $500M in annual revenue

The steps and resources listed are representative rather than exhaustive and are current as of date of publication. Please note that McKinsey & Company does not endorse any of the listed websites or their sponsors. The contents of this site, including any statements, articles, graphics, charts, checklists, and other materials (“Content”) are for informational purposes only. The Content is not intended to be a substitute for professional advice or to constitute medical or legal advice.