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Small Businesses Are Dying by the Thousands And No One Is Tracking the Carnage
Key Excerpts from Article on Website of Bloomberg
Posted: August 24th, 2020
https://www.bloomberg.com/news/articles/2020-08-11/small-fir...
Small businesses are disappearing by the thousands amid the Covid-19 pandemic, and the drag on the economy from these failures could be huge. This wave of silent failures goes uncounted in part because real-time data on small business is notoriously scarce, and because owners of small firms often have no debt, and thus no need for bankruptcy court. Yelp Inc., the online reviewer, has data showing more than 80,000 permanently shuttered from March 1 to July 25. About 60,000 were local businesses, or firms with fewer than five locations. About 800 small businesses did indeed file for Chapter 11 bankruptcy from mid-February to July 31, according to the American Bankruptcy Institute, and the trade group expects the 2020 total could be up 36% from last year. While the businesses are small individually, the collective impact of their failures could be substantial. Firms with fewer than 500 employees account for about 44% of U.S. economic activity, according to a U.S. Small Business Administration report, and they employ almost half of all American workers. About 58% of small business owners say theyre worried about permanently closing, according to a July U.S. Chamber of Commerce survey. In a June 2020 NFIB survey, a net 31% of owners reported lower sales in the past three months, while 7% reported higher sales a year earlier. In the same survey, only 13% of business owners said it was a good time to expand, a dip from 24% a year earlier.
Note: For more along these lines, see concise summaries of deeply revealing news articles on the coronavirus from reliable major media sources.
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