Alignable: 44% Of Small Businesses At Risk By End Of Q1, 2021

TREND TRACKER | DATA INSIGHTS | While coronavirus vaccines represent a light at the end of the tunnel for many devastated small businesses, sadly, current vaccine distribution plans might be too little too late for some SMBs.  And while President Biden's latest PPP revisions represent a step in the right direction, will they be enough to save most of the SMBs on the brink right now? 

To help illustrate the severity of the current problem, we wanted to share the results of the Alignable Q1 Revenue Poll, which shows that 44% of SMBs worry that they might not be able to earn enough income by the end of this quarter to stay afloat.

Conducted from 1/28/21-- 2/15/21, the Revenue Poll asked two key questions, which helped to determine the percentage of businesses at risk of closing for good by March 31, 2021. 

The survey asked 6,029 small business owners:

• What percentage of Q1, 2020 revenue/sales are you anticipating for Q1, 2021?
• What percentage of Q1, 2020 revenue/sales do you need to achieve in Q1, 2021 to stay in business?

Combining those answers into the following chart, you can see that a significant percentage of small business owners feel they are on the brink of shutting down. 

The reasons include that many customers are still afraid to visit Main St. shops. Beyond a decrease in customers, 51% of businesses tell us they have half the revenue or less coming in compared to the time prior to COVID-Era, according to Alignable's February Road To Recovery Report.  

So, the customers many retailers and restaurants do have are spending less money, because their income has been negatively affected by COVID through layoffs, the loss of their own businesses, or their clients shutting down. 

Here are some quotes from polltakers, describing their current difficulties:

“Customer confidence in their future cash flow is low right now.  And so discretionary spending, which our business is based on, is significantly restricted. We need customer confidence to elevate to bring them back and make them feel comfortable spending their money.”

“My income has dropped to zero.”

“I have an online editing and writing business and my customer base is completely gone, due to businesses being unable to continue advertising or marketing. Some have closed for good, while others cut back their marketing nearly 100%.”

“If you truly want really small businesses like mine to survive, then realize that the government waited too long. The ships have taken on water and people like me are on their last legs. I need help fast. My company has nothing coming in.”

“2020 revenue was down 100%. January 2021 revenue is down 98%.”

Industries Most In Need Of Help

Examining different industries most at risk, restaurants/bars topped the list, with 50% of owners participating in the survey worried that they might not make it through March. 

Other industries also had startling percentages of small business owners who say they're in jeopardy of closing:

• Travel/Lodging (48%)
• Caterers (48%)
• Entertainers (41%)
• Gyms/fitness (37%)
• Event planners (36%)
• Artists (33%)
• Beauty Salons (23%). 

These findings are further supported by examining the answers to the question: “How long with your cash on hand last?”

Cash On Hand Crisis

Overall, 55% of respondents said they will be out of cash reserves by the end of Q1. Of that group, 15% said their cash on hand is already gone. 

Looking at the demographics, the situation is even more challenging for minorities and women. 

• Two-thirds of minority-owned businesses expect to be out of cash reserves by the end of Q1. 
• And 62% of women-owned businesses participating in the poll expect to be in the same predicament.

Meanwhile, a significant percentage of PPP funds remain unclaimed, as small business owners are deterred from applying for many different reasons: confusion over whether they qualify, questions around whether the loan will be forgiven, worries about taking on more debt when they can’t count on income coming in, concerns about whether the funding amount will be sufficient, and much more. 

In fact, in another Alignable poll conducted from 2/13/-2/17/21 among 5,089 small business owners, only 31% have applied for the PPP. Of that group, 5% have already been rejected, 11% were approved and have their money, and the rest are waiting to hear back from their lending institutions. 

To see other polls we’ve conducted since March 2020, please go to the Alignable Research Center.

ABOUT THE ALIGNABLE RESEARCH CENTER

Alignable is the largest online referral network for small businesses with over 6 million members across North America. 

We established our research center in early March 2020, to track and report the impact of the Coronavirus on small businesses, and to monitor recovery efforts, informing the media, policymakers, and our members.

For more details about any of these findings, including the methodology behind our latest polls, please contact Chuck Casto at chuck@alignable.com.