Small and Very Small CT Businesses Hit Hard by Pandemic, Quickly Take Steps to Respond, Survey Finds
/The impact of the pandemic on Connecticut’s small and very small businesses is plainly evident, a review of data compiled at the start of the year by the Connecticut Small Business Development Center (CT SBDC) illustrates.
Business owners personally worked without a salary from the periods of June through August and September through December 2020, at 45.9% and 44.7% respectively. More than three-fifths of (62%) indicated that during the survey period (December 1, 2020 through January 4, 2021), their business was operating at partial capacity, according to state guidelines.
A total of 702 businesses shared their operational experiences from the beginning of the COVID 19 pandemic in March 2020 through early January 2021 in a market assessment survey conducted by the CT SBDC. CTSBDC engaged Great Blue Research of Glastonbury, to assist in operationalizing objectives and assuring a statistically valid response. The survey was distributed to businesses with fewer than 500 employees and less than $20M in annual revenue. Survey distribution began on December 1, 2020 and closed on January 4, 2021.
As a representation of the small business population in Connecticut, the survey respondents were overwhelming very small businesses, with 43.2% employing between two and 10 people and 43.9% self-employed with no employees.
While 8 of 10 respondents experienced a decline in revenue as compared with the prior year, three quarters experienced a significant decline of 25% or more, during the survey period. The survey also showed a disparity among recipients of PPP loans, with 43.9% of minority–owned businesses and 64.5% of non-minority-owned companies receiving a loan.
“While the challenges over the past year have been widely documented, we wanted to quantify the impact on Connecticut’s small businesses,” said Joe Ercolano, State Director, CTSBDC.
On the expense side of the equation, the survey revealed that 60% of respondents report their expenses either stayed the same or were higher than the prior year. Coupled with a decline in revenue, profitability and business viability came under great pressure, the survey analysis pointed out. Restaurants and accommodation and food services business owners experienced a disproportionate impact on their business.
The analysis added that it was “noteworthy” one-quarter of respondents (24.6%) applied for or took advantage of the Connecticut Department of Economic and Community Development’s (DECD) Connecticut Cares Grant in November and December.
Among the findings identified in the survey report:
Eight out of ten respondents experienced a decline in revenue over 2019, with 75% posting a decline of 25% or more.
Close to one out of two respondents reduced employee hours at the start of the pandemic from March-May 2020.
Looking out twelve months, 60% were considering changes to their business, with one in five considering either expanding or closing their business. Overall, almost half of the respondents indicated they were confident their business would return to profitability in twelve months, with 55% minority-owned respondents citing confidence.
The survey found that “a large majority of business owners did not wait to adapt to a new reality and have clearly thought about the changes they want to make in their business model and strategy. How they market their products and services, what they offer their customers, and how they sell to them are the top change areas they are actively considering or already pursuing.”
With the significant impact on revenues, not surprisingly, one-half of respondents reported plans to change their marketing strategies in the coming year. One out of three businesses expressed interest in assistance with building or starting online sales, with particular focus on search engine optimization, social media and website development.
“The resiliency of many of these businesses is remarkable,” offered Ercolano. “This survey shows businesses have assessed their strategies and have started identifying ways to move forward.”
CT SBDC provides business advising to small business owners and entrepreneurs to start, grow, and thrive in Connecticut. The professional staff of 20 Business Advisors offers no-cost confidential and expert business advising to small business owners and entrepreneurs to overcome challenges and reach their goals. The Connecticut SBDC is funded in part through a cooperative agreement with the U.S. Small Business Administration, the Connecticut Department of Economic and Community Development, and the University of Connecticut.
