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.
- Read through this selection of consumer sentiment learnings for potentially useful insights as you think through next steps for your business
- Consider exploring publicly-available mobility data to get a sense for how out-of-home activity is changing over time across locations and types of activity. Here are some examples:
"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.
- Consider these thought starters for taking your business online and staying connected with customers remotely
"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.
- Think through these considerations for reopening, starting with official CDC and local health guidance
- Consider these tactical approaches for preparing to reopen and modifying business operations
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
- Explore resources for pro bono professional services
- Check back soon for additional relevant resources