Scientific Opinion Poll: California Small Business Owners Facing Closure as Congress Debates Additional Federal Relief
New Small Business Majority poll reveals difficulties entrepreneurs continue to face nine months into the pandemic, with business owners of color experiencing greater impacts.
(Sausalito, CA) - As the state of California faces new public health orders to mitigate the spread of COVID-19, a new Small Business Majority scientific poll released today sheds light on the distressing effects the pandemic has had on small business owners across the state. The poll reveals California business owners continue to face uphill challenges to keep their doors open, and entrepreneurs of color are more likely to close their doors in the next few months than their white counterparts. These results stress the need for Congress to act swiftly to pass additional federal relief in order to prevent closures.
While the state of California has acted on behalf of small businesses by providing new state-funded grant and loan programs, many business owners are making difficult decisions to keep their doors open. One-third have cut employee hours, a quarter have reduced employee wages and another quarter have changed their business model. The survey finds that entrepreneurs of color are more likely to have taken these drastic steps. Closures are becoming inevitable for entrepreneurs of color, with 28% reporting they may be forced to temporarily close their business in the next three months, and 17% say they are likely to close their business permanently.
Additionally, of those employer firms that reduced their number of employees during the pandemic’s height and economic downturn, more than 60% report they still have not restored their headcount to pre-pandemic levels.
“With the safety of my employees and customers as a top priority, I faced the tough decision to let go of all of my employees during shelter-in-place orders, and I’m still unable to restore my full staff,” says Shawn Hetherman, owner of Cookie Cutters Haircuts for Kids in Santa Rosa. “The cycles of temporary closures and reopenings have been detrimental to my business. The pandemic has a financial and mental cost as small business owners like me had to rethink our business model while our staff, who are deemed non-essential, struggle day-to-day in maintaining their lives.”
While some small businesses have been able to access federal relief, poll findings reveal how small business owners struggled to navigate the application process for funding programs, including the Paycheck Protection Program (PPP). Of those who applied, 64% said the PPP application process was difficult, and only 17% received the full amount of the loan they requested.
“I was beginning to feel defeated and ready to close the doors to a business I helped found 25 years ago. I thought federal aid could be a lifeline, but the application process proved to be a daunting task with multiple layers of misinformation regarding my application status from the Small Business Administration,” says Shelley Clark, owner of Precision Gymnastics in Rancho Cucamonga. “This is why small business owners need a more efficient long-term solution, like a federal grants program, to better support small businesses as we navigate the financial landscape and seek assistance in staying open.”
The next few months will prove to be even more challenging as the pandemic drags on and funding potentially runs dry. Small business owners report they anticipate making further cuts and reductions to their business over the next few months, and a majority of those with commercial space are struggling to make rent or mortgage payments.
“California small businesses have been pushed to their limit as they struggle to find ways to remain open. More than half report their revenues are still down compared to this time last year and entrepreneurs of color are more likely to be facing permanent closure,” says Mark Herbert, Vice President of California at Small Business Majority. “California has recently taken steps to act on behalf of vulnerable small businesses, but in order to protect the small business community, we are doubling down on our call to Congress to deliver a comprehensive stimulus package, a lifeline small business owners desperately need right now.”
This poll represents the opinions of 418 California small businesses with business owners of color representing half of the survey sample. The survey was conducted November 10 - 23, 2020 by Lake Research Partners for Small Business Majority. For a copy of the full report, please visit: https://smallbusinessmajority.org/our-research/california-small-businesses-face-difficult-decisions-as-pandemic-continues-and-funding-freezes
Small Business Majority is able to connect members of the media with business owners in different regions throughout the state of California to share the impacts their businesses are facing.
About Small Business Majority
Small Business Majority is a national small business organization that empowers America's diverse entrepreneurs to build a thriving and inclusive economy. We engage our network of more than 80,000 small businesses and 1,000 business and community organizations to advocate for public policy solutions and deliver resources to entrepreneurs that promote equitable small business growth. Our deep connections with the small business community along with our scientific research enable us to educate the public about key issues impacting America’s entrepreneurs, with a special focus on advancing the smallest businesses and those facing systemic inequalities. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.