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Micro-businesses and businesses owned by women and people of color describe the greatest difficulties and face the hardest road to recovery.
LISC Boston is a proud co-sponsor and partner of the survey.
Small businesses in Massachusetts have suffered serious damage due to the COVID-19 pandemic, a new survey has found, with just one in three reporting they are fully open. Financial results for the first half of the year show the scale of the challenge, with 64% of small businesses reporting drops in gross revenue of 25% or more for the first half of 2020. Nearly half (46%) of small businesses say they have laid off or furloughed employees, including 77% of restaurants. Businesses owned by women and people of color have been hit particularly hard and report greater financial losses.
That’s according to a new survey of small businesses released today by The MassINC Polling Group. The survey was sponsored and distributed by a large group of business and community organizations across Massachusetts. The survey included targeted oversamples of businesses owned by women and people of color.
The poll will be released during a forum on Thursday July 23, from 11:00 - 12:30. In addition to a slide presentation of the survey’s key findings, the forum will include comments from Housing and Economic Development Secretary Michael Kennealy and MassINC Transit Oriented Development fellow Dr. Tracy Corley. A question-and-answer session will follow. A preview of the slides for the event is available upon request.
“This survey offers the deepest look we have at what our state’s small businesses are going through during the pandemic, showing the size and shape of the challenges and mapping the road ahead,” said Steve Koczela, President of The MassINC Polling Group.
The survey was developed and distributed by a coalition of small business and economic development groups, spearheaded by Amplify Latinx and the Lawrence Partnership. “We engaged an expansive network of sponsors and partners from across the Commonwealth to distribute this survey to small businesses,” said Derek Mitchell of the Lawrence Partnership.
“We were thrilled by the strong response we received, especially from women and businesses owned by people of color,” said Betty Francisco of Amplify Latinx. “These findings will help inform the way that government, service providers and philanthropy respond to the needs of our most vulnerable businesses.”
The smallest businesses have had it worst and face the steepest road to recovery (See chart below). A majority (55%) of businesses reporting under $100,000 gross revenue for 2019 saw declines greater than 50% for the first part of the year, compared to 35% of businesses that made over $500,000 in 2019. This dynamic has the potential to exacerbate inequities, as smaller businesses are more likely to be founded or owned by women and people of color. Indeed, 54% of women-owned businesses reported losing half or more of their income, compared to 39% of businesses owned by men.
MassINC's Polling Group found micro-businesses and businesses owned by women and people of colordescribe the greatest difficulties and face the hardest road to recovery.
Businesses that rely on customers coming into a store or onto their premises, such as restaurants or beauty-related businesses, have faced unique challenges. Among restaurants, 70% report losing seeing their revenue drop by half or more, and 40% say they have missed rent. Beauty businesses are in a similar situation; 47% have missed rent payments, compared to 21% of all small businesses. The potential wave of evictions coming to the residential market could also affect commercial properties, with particularly damaging impacts to main street retail store fronts. Minority-owned businesses are at elevated risk, with 29% reporting missing rent payments compared to 19% of white-owned businesses.
Recovery poses several specific hurdles in terms of getting employees back to work. Nearly half (46%) say they have laid off or furloughed employees since the pandemic began. Among businesses who are having trouble getting employees back to work, 66% cited employees making more money from unemployment than from work as an impediment. Workers fearing of being infected (48%) and lacking childcare (33%) were also obstacles.
Paycheck Protection Program (PPP) loans have provided relief to some small businesses, with 71% saying they applied, close to official SBA and Census Bureau data for Massachusetts. Of those who applied, 78% say were approved for the full amount, and another 13% received a smaller amount. But the smallest businesses were least likely to have been boosted by PPP (see chart below). Just 39% applied for a PPP loan, and 55% of those were approved for the full amount of their application. Many of the smallest businesses are single individuals, and some lack formal banking relationships. Others may have sought other kinds of financial relief to get through the pandemic.
The survey also explored what specific types of assistance businesses need to recover from the pandemic’s impacts. The number one request was cash, with grants and revenue sources topping the list of needed help. Beyond that, larger businesses were interested in help with PPP loan forgiveness, while the smallest businesses, who were less likely to apply for PPP loans, were more interested in help with digital marketing and other elements of online operations. Help selling online was seen as particularly useful to retail-sector small businesses.
About the Poll: These results are from a survey of 1,868 small businesses (fewer than 500 employees) in Massachusetts. Respondents were contacted by a network of sponsoring and participating organizations (see graphic below) and invited to complete an online survey. The survey was offered in English, Spanish, Portuguese, Mandarin, Khmer, Vietnamese, and Haitian Creole. The final survey data was weighted to estimated population parameters by race and gender of the business owners, based on data from the U.S. Census and the Small Business Administration.