The National Federation of Independent Business said its research shows the coronavirus outbreak is having a stark effect on small businesses as the situation drags on. NFIB reports 76% of small businesses (under 360 employees) surveyed last week consider the disruption as profound.
This has escalated from just under one-quarter of small businesses reporting the same earlier this month.
The survey found about 5% of businesses said the impact has been positive. These firms are likely experiencing stronger sales due to a sharp rise in demand for certain products, goods, and services. This will presumably ease in the coming weeks as consumers feel more secure about their personal supply levels, NFIB said.
The national survey did not provide state-specific data, but Arkansas officials said they expect unemployment claims to rise between 8,000 to 10,000 in the coming days from people displaced from their jobs amid social distancing guidelines and the temporary shutdown of many businesses from fitness centers to nail salons and dentists’ offices.
Sylvester Smith, director of NFIB, said of those businesses negatively impacted, 23% are experiencing supply chain disruptions, 54% slower sales, and 9% sick employees. The 9% of owners citing sick employees likely responded out of heightened concern and precautions with sick employees showing some signs of cold or flu-like symptoms, but not necessarily because they have employees who have tested positive for the virus.
NFIB said almost all small business owners are taking some sort of action adjusting to their changing economic condition or to protect themselves from potential disruption. Just 6% of owners have not taken any action in response to the outbreak, a marked departure from 52% not taking action two weeks ago.
The level of concern among small business owners about the coronavirus impacting their businesses has elevated significantly over the past two weeks. About 68% of small business owners are “very” concerned about its potential impact on their business compared to 16% in the earlier survey. Another 23% are somewhat concerned and 9% are slightly concerned. Just 1% are not at all concerned.
While 47% of respondents said they have not talked with their bank about financing needs, 30% are planning to do so soon. Another 13% have talked with their personal bank already, 9% with the SBA about their loan programs, and 1% with an online lender.
Smith said the vast majority of small businesses are now impacted by the COVID-19 outbreak and owners are taking the threat to their business seriously.
Arkansas Gov. Asa Hutchinson is releasing $4 million from the Quick Action Closing Fund — created to provide cash incentives for businesses expanding from locations in Arkansas — to support “bridge loans” to small businesses that need help making payroll and covering other essential costs. These loans can be up to $250,000.
Camille Hector is a co-owner of Crackerjack NWA, a food truck based in the Prairie Creek area of Rogers that serves comfort food with a twist. Hector’s husband Jason runs the truck as chef and operator. Crackerjack typically serves the lunch crowds at large employers in the Rogers and Lowell area, but with most of them now implementing work-from-home that business has dried up.
She said the truck also had numerous events to work this month and next which have been canceled or postponed.
“The Glowrun 5K in Rogers is now a virtual run and concerts at Gulley Park and other festivals have been put on hold,” she said.
Hector said the truck is opening for lunch, a couple of hours a day for people in the neighborhood (13998 East Hwy. 12) in the Prairie Creek area of Rogers. She said being fairly new to the neighborhood it’s been a challenge to get the word out.
She said getting the food ingredients needed to fill orders has been a constant challenge in the past couple of weeks. She said eggs, rice, noodles and napkins remain in short supply.
“We use the noodles for our mac and cheese and that’s a popular dish on the truck. The rice shortage is a staple for the red beans and rice dish and now that’s just beans. We can’t find eggs anywhere and resorted to fresh eggs we were able to get from a local farmer, but the cost was more and that hurts margins,” she said.
While the truck is mostly idle, she said the couple has kept their four-year-old out of preschool to save on expenses. On a positive note, she said they had heard from a group they recently served at an event who is asking food trucks to set up in certain neighborhoods to provide food options to people within a few steps from where they live.
Hector said she loves the Support Local NWA campaign launched to encourage consumers to stock up on gift cards from local businesses that can be redeemed at a future time.
“We’re living in a weird time — and for small businesses like us, this will be a tough time. We’re hanging in there and everybody is doing the best they can during these challenges,” Hector said.