Small Businesses Sacrifice and Succeed During COVID-19

We recently checked in with 400 of our small business borrowers, who reflected on how they navigated COVID-19. Through a national survey, entrepreneurs shared both the sacrifices they’ve made–nearly 40% didn’t pay themselves through 2020–and how they’ve forged ahead, with many business owners hiring new employees. 

Who responded

Survey respondents included 400 diverse small business owners who took out loans from Accion Opportunity Fund in 2019. Nearly half of respondents work in the transportation/warehousing or retail sectors, 85% are people of color, and 86% have five or fewer employees.

The entrepreneurs shared how they fared throughout the COVID-19 pandemic in 2020:

COVID-19 devastated small business revenue…

Unsurprisingly, the majority of survey respondents reported that their revenue plummeted during 2020:

• 61% of respondents said their 2020 revenues were less than 2019; respondents’ average revenues decreased by 49%

• 38% of small business owners did not take home any pay of their own in 2020

“[The pandemic was] an exercise in serious crisis management.” -Warren Brown, creator of Don’t Forget Cake and Spark Bites, who exhausted his funds to stay afloat and continue to pay his employees. Read about how Warren is now optimistic about what’s ahead.

…yet small business owners forged ahead

Many small business owners rebounded from adversity:

• While 38% of businesses closed down for some or all of 2020, 75% of these reopened by the time of the survey

• 83% of small business owners took steps to adapt to COVID-19, including changing their products and services, pivoting to online sales or service delivery, finding new clientele, and moving operations into reconfigured spaces
• Each small business retained or created 3.8 jobs on average, including the owner

• In fact, 62% of businesses that stayed open in 2020 saw a net gain in employment
• 27% of businesses laid off employees in 2020, but half of those were able to hire some or all employees back by the time of the survey

How did small business owners support their staff?

• 28% adapted scheduling to meet needs of caregivers or for other personal reasons
• 23% opened dialogue with employees around racial justice and equity issues
• 21% connected employees to community supports
• 16% offered time off/flexibility for workers affected by the racial justice movement or wanting to participate in protest or other action
• 15% coordinated or provided transportation to/from work