Small Businesses Lay Off Employees in Response to Coronavirus (COVID-19); Plan to Re-Hire in a Year when Revenues Increase

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May 26, 2020, 09:48 ET

WASHINGTON, May 26, 2020 /PRNewswire/ -- Forty-seven percent of small business owners have let go of employees since March 2020 due to disruption caused by the coronavirus (COVID-19) pandemic, but 36% hope to re-hire in a year, according to new data gathered by SCORE, the nation's largest network of expert, small business mentors. Business owners report mixed responses to the CARES Act, citing that direct payment to individuals was the most helpful aspect. Currently, one-third (32%) of small businesses have received outside financial relief from non-governmental sources, including delays for existing loan payments, improved payment terms from vendors and expanded lines of credit.

Infographic: The Impact of COVID-19 on Established Small Businesses - April 2020

Since March 2020, roughly half (47%) of small business owners have let go of employees in some capacity, but 36% hope to re-hire in a year:

39% have furloughed or temporarily laid off employees.
35% have reduced employee hours or pay.
32% have made no change with respect to employees.
8% of established small business owners have fired employees.
3% have hired new employees.

A majority (86%) of established small businesses expect revenue to decrease in the next three months:

50% of established small businesses expect revenue to be 75% lower.
20% expect revenue to be 50% lower.
16% expect revenue to be 25% lower.
6% expect no change in revenue.
6% expect revenue to be 25% higher.
1% expect revenue to be 50% higher.
1% expect revenue to be 75% higher.

In the next six months, 75% of established small businesses expect revenue to decrease, while 15% expect revenue to be higher:

20% of established small businesses expect revenue to be 75% lower.
32% expect revenue to be 50% lower.
23% expect revenue to be 25% lower.
10% expect no change in revenue.
10% expect revenue to be 25% higher.
4% expect revenue to be 50% higher.
1% expect revenue to be 75% higher.

One year from now, roughly half (55%) of established small businesses expect revenue to be lower, while one third (31%) expect revenue to be higher:

10% of established small business owners expect revenue to be 75% lower.
17% expect revenue to be 50% lower.
28% expect revenue to be 25% lower.
14% expect no change.
16% expect revenue to be 25% higher.
9% expect revenue to be 50% higher.
6% expect revenue to be 75% higher.

Established small business owners report mixed attitudes on the CARES Act:

45% of small businesses said direct payments to individuals were helpful, while 28% did not know, and 17% said they were not.
34% said unemployment insurance benefits for the self-employed were helpful, while 26% did not know, and 19% said they were not.
30% said the Small Business Debt Relief program was helpful, while 28% did not know, and 18% said it was not.
39% said the Emergency Economic Injury Grants and Disaster Loans (EIDL) were helpful, while 34% did not know, and 14% said they were not.
39% said the Payment Protection Program (PPP) was helpful, while 20% did not know, and 21% said it was not.

32% of established small businesses have received outside financial relief:

20% of established small businesses received delays for existing loan payments.
7% received improved payment terms for vendors
4% received expanded lines of credit.
3% received crowdfunding or other community requests.
3% received new loans.

"Small business owners are committed to taking the necessary steps to protect the future of their businesses," said SCORE CEO Bridget Weston. "While that unfortunately means that some are making temporary cuts to their employee rosters, our data shows that hiring is expected to increase, as revenues increase over time. For now, small businesses should take advantage of funding and resiliency resources like those available on SCORE's Coronavirus Small Business Resource Hub, to help them plan for future success."

Download the infographic for more information on small businesses' response to COVID-19.

About SCORE

Since 1964, SCORE has helped more than 11 million aspiring entrepreneurs. Each year, SCORE's 10,000 volunteer business experts provide free small business mentoring sessions, workshops and educational services to more than 260 chapters and 1,500 communities nationwide. In 2019, SCORE volunteers helped to create 29,681 new businesses and 67,706 non-owner jobs.

For more information about starting or operating a small business, or on volunteering with SCORE, visit SCORE at www.score.org. Follow @SCOREMentors on Facebook, Instagram and Twitter for the latest small business news and updates.

Funded in part through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

Contact Information
Betsy Dougert
800-634-0245
[email protected]

SOURCE SCORE