A second survey of more than 1,600 NH businesses conducted for The NH Small Business Development Center (SBDC) shows companies continue to deal with fallout from the pandemic, including temporary closures, reduced hours and decreased revenue.
Phase 2 of the Business Resiliency Survey was conducted with the University of NH's Survey Center from Feb. 1-19, with responses from 1,611 businesses in 174 NH cities and towns. Much has changed for small business owners since the original survey was conducted in June 2020. And many new questions have emerged regarding anticipated needs and challenges as businesses continue to navigate the pandemic.
The good news is businesses are more confident than they were in June in the continued survival of their business in the short and long-term as more than four in five respondents are confident their business will be operating in 12 months. Very small businesses, those in Northern NH, and those in the arts, entertainment, and recreation industry are particularly more confident than they were in June. Respondents are also more bullish than in June in their expectations for the recovery of the state's economy to pre-pandemic levels. Few still believe that this will happen within three months, but more than seven in 10 are confident it will happen within 12 months.
“The effects of the pandemic are far from over. Small businesses will continue to need SBDC’s advising and education long into the future if we want to see the state’s economy recover to pre-pandemic levels,” says Liz Gray, state director of the NH SBDC.
SBDC NH State Director Liz Gray
Reduced Hours and Temporary Closures
Nearly half of respondents say their business has reduced hours of operation since the pandemic began and one-third have closed temporarily. Most of those who reduced hours say their business cut more than a quarter of their hours and half of those who closed temporarily say they did so for one to three months. Businesses that closed temporarily most often did so due to health and safety concerns, being required to close by government order, or due to a loss of revenue, while others report closing because they were homeschooling children or were caring for a family member, because of suspected or confirmed COVID-19 cases, or because employees were unable or unwilling to work.
The average respondent's business has just 12 employees, which is largely unchanged since June but is down slightly compared to mid-February 2020, when businesses reported an average of just under 15 employees. Nearly half say they currently have the same number of employees as they did in February 2020, while three in eight report having fewer employees.
Seventy percent of respondents say their monthly revenue decreased as a result of the pandemic. While this proportion remains high, it has fallen since June 2020 (83%). Respondents cite the same top four factors as they did in June 2020: a decline in sales, reduced hours of operation, being required to close, and supply chain interruptions. The decline in sales was cited as the chief concern. Three in eight say their accounts receivable have been slower as a result of the pandemic, down from nearly half in June, while a quarter report deferring or modifying their payments to vendors due to COVID-19, also lower than in June.
Three-quarters of respondents say their business applied for financial relief in 2020 and just over half plan to apply for relief in 2021. The Payroll Protection Program was the most commonly used federal relief program; nine in 10 respondents say their business received it, while just over half received an Economic Injury Disaster Advance or Loan. Among state, municipal, and private relief programs, three-quarters received relief through unemployment for their employees and through the Main Street Relief Fund while nearly two-thirds received relief through unemployment for themselves. Use of unemployment increased dramatically since June 2020, when only about a quarter reported using these relief options. Overall, respondents are far more likely than in June 2020 to report that their business received relief from federal, state, municipal, and private sources.
Only one in six respondents say their business had a resiliency or continuity plan prior to the COVID-19 pandemic but another fifth of respondents say their business has developed one since. Larger businesses are more likely than others to have a plan before the onset of the pandemic. Most businesses that do have a resiliency or continuity plan report lacking at least one important component of their plan.
Nearly two-thirds of respondents believe that resiliency planning will be very important or somewhat important to their business in the future, including more than three-quarters of those with a plan but also a majority of those who say their business currently lacks a plan.
Management of Business
As a result of COVID-19, just over half of respondents say their business purchased PPE for their employees while four in 10 maintained or brought employees back under the Payroll Protection Program and just over a third changed the layout of their business to protect employees. Businesses are slightly more likely than in June to report having purchased PPE and changed the layout of their business. One in five businesses have some employees working remotely, unchanged since June 2020, with larger businesses more likely to do so.
Businesses also implemented innovations and modifications due to COVID-19 with more than a quarter now offering new products or services, collaborating with other businesses, and using e-commerce.
When asked about one successful thing their business has done in response to COVID-19, respondents most frequently mention that they changed how they deliver or produce their products or that they protected the health of employees or customers, while others mention how they implemented remote or virtual work or practiced better external communication or advertising.
While 19% of respondents say that their business is better off financially than they were in June 2020, 35% say they are in about the same position financially, and 42% are worse off. Businesses in health care, social assistance and manufacturing are more likely to say they are better off.
As in June, maintaining sales, revenue and customers are the biggest concerns of respondents as their businesses recover from COVID-19, followed by concerns about the availability of the COVID-19 vaccine for employees and public acceptance of the vaccine. Majorities also are concerned about supply chain disruptions, access to capital, cybersecurity, timely payment of bills, and energy costs. Concern about timely payment of bills and access to PPE have declined since June but concern over access to COVID-19 testing and cybersecurity have increased.
Respondents most frequently cite renewed access to customers, health and safety guidance, financial assistance, and access to the COVID-19 vaccine for their employees as most important to their business in the future. Mirroring results in June 2020, most businesses plan to continue the changes and innovations they made in response to COVID-19 even after the pandemic has passed. More than three-quarters of those who are using e-commerce, collaborating with other businesses, offering takeout, offering new products or services, and having employees work from home plan to continue doing so.