Most Businesses Believe They Can Reopen Safely, Amid Great Challenges
Trenton, NJ – Seventy percent of business owners say they are able to operate safely under CDC social distancing guidelines according to a new NJBIA Business Recovery Survey inquiring how a soft opening might affect their business model.
However, a large majority of New Jersey business owners say they’ll need more than half of their usual client or customer base to break even in any given month.
Additionally, many respondents said they would never generate a profit, or need at least a year to generate a profit, if businesses are reopened at 50% capacity.
“The results of this survey put a finer detail on the true challenges that lie ahead, even with a soft opening at 50% capacity, as we work toward a recovery and reinvention framework for New Jersey’s economy,” said NJBIA President and CEO Michele Siekerka.
“Some of our additional data focusing on revenues and financial assistance also reveal great challenges. However, now knowing the true needs and concerns of our businesses in even a partial re-opening allows us to work toward solutions and an effective plan of action for the reopening of our economy.”
NJBIA has been working alongside a coalition of 80 business and nonprofit associations, advocating for policies on the state and federal level to provide employers relief and funding during the COVID- 19 health crisis and to aid in their recovery.
REOPENING STATEMENTS
Respondents were asked what percentage of patrons, clients and customers are required, on average, for their business to break even in a given month. They responded:
- 0-24%: 9%
- 25-49%: 7%
- 50-74%: 29%
- 75-99%: 36%
- 100%: 18%
Assuming a 50% partial reopening of business facilities is allowed, respondents were asked how long they anticipate it would take for their business to generate revenues comparable to pre-COVID- 19 profits. They responded:
- 3 months or less: 9%
- 4-6 months: 17%
- 7-9 months: 11%
- 10 months to a year: 14%
- More than a year: 23%
- More than two years: 6%
- I could never generate a profit at 50% capacity: 21%
There was a mixed range of responses from employers when asked what percentage of their total, in-person workforce is needed for their business to operate productively:
- 0-24%: 19%
- 25-49%: 16%
- 50-74%: 23%
- 75-99%: 15%
- 100%: 27%
Employers were also asked to list their top three struggles for their businesses, resulting in the following leading responses:
- Meeting payroll costs: 59%
- Paying the rent: 44%
- Ensuring worker safety: 22%
- Repaying existing loans on time: 22%
- Handling supply chain disruptions: 21%
- Making quarterly tax payment: 20%
- Paying payroll taxes: 19%
Other business struggles yielding 12% or less included: Paying quarterly or annual CBT/GIT payment; complying with labor mandates; cost of maintaining equipment; finding enough employees to fill workplace needs; concerns about future lawsuits.
Members were asked if their business is able to operate under CDC social distancing guidelines. A total of 70% said yes, while 19% said they were not sure. Another 10% said they would not be able to operate under CDC guidelines.
“It’s a positive to see the capability and willingness of employers to operate with appropriate social distancing,” Siekerka said. “What remains to be seen is what entry limitations will be put on businesses, and whether customers will have the same initial willingness to patronize out of health concerns.”
REVENUES AND REALITIES
A whopping 66% reported a decrease in revenue during the current health crisis, while another 27% reported no revenue – leaving only 5% of respondents reporting normal revenue.
At the same time, about 32% of respondents have laid off at least one worker as a result of COVID- 19.
“It would appear there’s a correlation between the number of companies reporting no revenue to the number of companies having to lay off at least one employee,” said Nicole Sandelier, NJBIA’s Director of Economic Policy Research. “Nearly 8% of respondents said they have let go of 10 workers or more, which relates to some of the high unemployment numbers we have seen on a state and national level.”
When asked how they were accommodating for lost revenue, 53% said they either reduced workers’ hours, or furloughed or laid off employees. Eleven percent said they tapped into business reserves or personal savings, while another 11% sought additional funding through loans, credit lines, government aid or increased donations.
STAYING OPERATIONAL
Thirty-six percent of respondents were forced to close as a result of an executive order. Of those, 70% envisioned their closure as being temporary, while 29% weren’t sure whether they would reopen or not.
Of those that were directed to close their premises, 70% said they were still operating remotely, but experiencing financial losses. Another 18% said they voluntarily closed, while 10% they were continuing operations as normal.
Overall, 54% of respondents listed their business as struggling to perform its essential duties, while another 25% said it was unable to perform its essential duties at all.
Employers were also asked how, or if, their physical workspace might be affected as a result of COVID-19. Nearly 29% said their workspace will not be impacted, while 23% anticipated increased costs for sanitizing and 20% expected added costs for PPE. Only 7% said they would need structural changes to implement social distancing.
GRANTS AND LOANS
NJBIA’s Business Recovery Survey was taken between April 23 and April 28. While there was an expectation that some of the data would change based on respondents receiving grants and loans after they took the survey, the overall results showed that most businesses were, by and large, playing the waiting game.
Some 74% of employers surveyed applied for the federal Paycheck Protection Program (PPP). Of those, 65% said they had not yet received their funding at the time they took the survey, while 30% said they had received funding. Five percent said they were not approved.
Employers who applied for PPP were asked how they intended to use those funds, and they were not limited to one choice. A little more than 98% of the respondents said they would put it toward payroll costs, while others said they would apply some funds to utilities (68%), rent (66%) and mortgage interest (15%).
Of the businesses who applied for a Small Business Emergency grant or loan from NJEDA, 78% had not received their funds as of the past few days.
The New Jersey Business Coalition has been strongly advocating for a portion of CARES Act funding to be used for an appropriation for the NJEDA in order to provide further relief to small business.
METHODOLOGY
The NJBIA Recovery Survey was conducted by the New Jersey Business & Industry Association from April 23 to April 28, 2020. At the time of the published press release on Tuesday, April 28, 2020, a total of 1,359 respondents, comprised of NJBIA members and members from other partnering business associations who are participating in the New Jersey Business Coalition, took part in the online survey. In total 1,420 respondents participated in the survey. Because of the additional responses received after the press release was published, the results below may differ slightly from those reported in the original press release. Totals may not equal 100% due to rounding.
QUESTIONS AND RESULTS
The Impact of Coronavirus
1. Do you own or manage a business or non-profit entity?
Answered: 1,398 Skipped: 22
Yes |
88.77% |
No |
11.23% |
2. Are you a primary decision maker for operational decisions about the organization, including finances and staffing?
Answered: 1,399 Skipped: 21
Yes |
93.35% |
No |
6.65% |
3. Approximately how many employees did your organization have prior to COVID-19
Answered: 1,397 Skipped 23
1 |
16.03% |
2-4 |
22.41% |
5-9 |
20.26% |
10-19 |
14.67% |
20-49 |
14.60% |
50-99 |
4.72% |
100-249 |
4.37% |
250-499 |
1.50% |
500+ |
1.43% |
4. A) What industry is your business?
Answered: 1,399 Skipped: 21
Mining and Logging |
0.00% |
Construction |
9.36% |
Manufacturing |
9.72% |
Trade, Transportation, Utilities |
4.15% |
Information |
1.00% |
Financial Activities |
2.64% |
Professional & Business Services |
19.66% |
Education & Health Services |
9.36% |
Leisure & Hospitality |
7.72% |
Other (please specify)* |
36.38% |
B) What industry is your business?*
*Responses to “Other” were reviewed and updated to provide more clarity to industrial breakdown.
Construction |
11% |
Education, Health Services & Social Assistance |
12% |
Financial Activities |
3% |
Information |
2% |
Leisure & Hospitality |
10% |
Manufacturing |
13% |
Mining & Logging |
0% |
Trade, Transportation, Utilities |
6% |
Professional, Business & Other Services |
35% |
Wholesale & Retail |
5% |
Other |
8% |
Other |
2% |
Arts, Entertainment, Recreation |
3% |
Real Estate |
1% |
Technology |
1% |
Warehousing & Distribution |
1% |
5. Was your business ordered to close as a result of an Executive Order?
Answered: 1,264 Skipped: 156
Yes |
36.16% |
No |
63.84% |
6. If your business was ordered to close as a result of an executive order, do you see your closure being:
Answered 667 Skipped: 753
Temporary |
70.31% |
Permanent |
1.20% |
Unsure |
28.49% |
7. If your business was not ordered to close as a result of an executive order, select the answer that best applies to you:
Answered: 1,033 Skipped: 387
We’re still operating and performing better than normal |
1.36% |
We’re still operating like normal |
9.39% |
We’re still operating, but experiencing financial losses |
70.28% |
We’re permanently closed as a result of COVID 19 |
1.45% |
We’re temporarily closed as a result of COVID-19* |
17.52% |
*Participants who selected the option for temporary closer were then asked when they plan to reopen. The overwhelming majority responded with some iteration of “when they are allowed”.
8. My business is:
Answered: 1,246 Skipped: 174
Struggling to perform its essential duties |
54.49% |
Performing its essential duties without challenge |
20.71% |
Unable to perform its essential duties |
24.80% |
9. Financially my business is experiencing:
Answered: 1,246 Skipped: 174
Normal revenue |
5.28% |
Surge in revenue |
0.87% |
Decrease in revenue |
66.56% |
No revenue |
27.39% |
10. What percentage of your operations have been able to be done remotely?
Answered: 1,263 Skipped: 157
0-24% |
61.05% |
25-49% |
8.55% |
50-74% |
10.53% |
75-99% |
14.09% |
100% |
5.78% |
11. How many employees have quit their jobs as a result of COVID-19?
Answered: 1,255 Skipped: 165
0 |
83.43% |
1-9 |
14.66% |
10-19 |
0.96% |
20-50 |
0.72% |
50+ |
0.24% |
12. How many employees have you laid off as a result of COVID-19?
Answered: 1,239 Skipped: 181
0 |
68.36% |
1-9 |
23.73% |
10-19 |
3.79% |
20-50 |
2.50% |
50+ |
1.61% |
13. How many employees have you furloughed as a result of COVID-19?
Answered: 1,232 Skipped: 188
0 |
66.64% |
1-9 |
23.78% |
10-19 |
4.30% |
20-50 |
3.25% |
50+ |
2.03% |
14. If you are struggling to access government aid, such as PPP, and EDA grant/loan or unemployment insurance, what is hindering your ability to do so?
Answered: 1,181 Skipped: 239
Waiting for response |
55.97% |
Ineligible |
9.40% |
Administrative difficulties in completing application |
7.37% |
Eligible, but rejected |
3.30% |
I am not struggling to access government aid |
18.54% |
I do not want government aid |
5.42% |
15. A) To adjust for lost revenue, my business has to:
Answered: 1,235 Skipped: 185
Reduce workers’ hours |
32.79% |
Layoff employees |
24.29% |
Furlough employees |
27.04% |
Cut employees. benefits |
6.96% |
Sell capital |
3.64% |
Take out a loan |
19.03% |
Tap into personal savings |
23.48% |
Not do anything |
13.60% |
Other (please specify)* |
25.18% |
B) To adjust for lost revenue, my business has to:*
*Responses to “Other” were reviewed and updated to provide more clarity.
Reduce workers’ hours |
20% |
Layoff employees |
16% |
Furlough employees |
17% |
Cut employees’ benefits |
4% |
Sell capital |
2% |
Seek additional funding:Take out a loan, tap credit line, government aid, seek increased donations |
11% |
Tap into business reserves or personal savings |
11% |
Not do anything |
11% |
Other |
8.5% |
Other |
2.5% |
Delay Bill Payments (Including vendor payments) |
1.3% |
Reduce Expenses & Overhead |
1.6% |
Reduce Pay (Including reduction in salary for Owner/ Executives) |
3.0% |
16. Please select the top three larges struggles for your business:
Answered: 1,254 Skipped: 166
Meeting payroll costs |
58.77% |
Paying the rent |
43.46% |
Repaying existing loans on time |
22.65% |
Ensuring worker safety |
22.17% |
Handling supply chain distribution with contractors and vendors shut down/reduced |
21.13% |
Paying my quarterly property tax payment |
19.30% |
Paying my payroll taxes |
18.74% |
Paying my quarterly and/or annual tax (CBT or GIT) payment |
11.72% |
Complying with labor mandates |
10.37% |
Cost of maintaining equipment |
10.13% |
Finding enough employees to fill my workforce needs |
7.18% |
My business is not struggling |
6.62% |
Lawsuits or concern for future lawsuits related |
4.47% |
Other (please specify) |
19.14% |
The Paycheck Protection Program
17. Did your business apply for the SBA’s Paycheck Protection Program (PPP)?
Answered: 1,292 Skipped: 128
Yes |
74.07% |
No |
25.93% |
18. Did your business receive PPP funding?
Answered: 882 Skipped: 538
No, we were not approved |
4.76% |
Yes |
30.39% |
Not Yet |
64.85% |
19. How does your business intend to use the PPP funds? (Select all that apply)
Answered: 868 Skipped: 552
Payroll costs |
98.16% |
Mortgage interest |
14.86% |
Rent |
65.32% |
Utilities |
67.86% |
20. To have your loan forgiven, 75% of your funds must be used for payroll expenses. Do you intend to seek forgiveness?
Answered: 869 Skipped: 551
Yes |
97.24% |
No |
2.76% |
EDA Grants and Loans
21. Did your business apply for an EDA grant or loan?
Answered: 1,228 Skipped: 192
Yes |
29.40% |
Yes, but was not approved |
5.70% |
No |
64.90% |
22. If your business applied for an EDA grant or loan, which did you apply for? (Select all that apply)
Answered: 401 Skipped: 1,019
Small Business Emergency Assistance Grant Program |
80.05% |
Small Business Emergency Assistance Loan Program |
46.38% |
23. Did you receive the funds yet?
Answered: 381 Skipped: 1,039
Yes |
21.52% |
No |
78.48% |
The Recovery from Coronavirus
24. If required, is your business able to operate under CDC social distancing guidelines?
Answered: 1,105 Skipped: 315
Yes |
70.77% |
No |
9.95% |
Not Sure |
19.28% |
25. If a 50% partial reopening of business facilities is allowed, what percentage of your total workforce is needed in-person for your business to operate productively?
Answered: 1,055 Skipped: 365
0-24% |
19.24% |
25-49% |
15.93% |
50-74% |
22.84% |
75-99% |
14.98% |
100% |
27.01% |
26. If a partial reopening of business facilities is allowed, what percentage of business by way of patrons, clients, customers etc. does your operation require on average to break even on any given month?
Answered: 1,044 Skipped: 376
0-24% |
9.67% |
25-49% |
7.18% |
50-74% |
29.50% |
75-99% |
35.63% |
100% |
18.01% |
27. If a 50% partial reopening of business facilities is allowed, how long do you anticipate it taking for your business to generate revenues comparable to pre-COVID-19 profits?
Answered: 1,059 Skipped: 361
3 months or less |
8.31% |
4-6 months |
17.75% |
7-9 months |
10.58% |
10 months to a year |
14.35% |
More than a year |
22.29% |
More than two years |
5.85% |
I could never generate a profit at 50% capacity |
20.87% |
28. Before the COVID-19 health crisis, what percentage of your workforce worked remotely at any given time?
Answered: 1,098 Skipped: 322
0-24% |
87.70% |
25-49% |
3.73% |
50-74% |
2.19% |
75-99% |
1.64% |
100% |
4.74% |
29. Was your business able to find new efficiencies and cost-savings opportunities as a result of an increased reliance upon a remote workforce?
Answered: 1,099 Skipped: 321
Yes |
13.10% |
No |
53.05% |
We did not have more people work remotely |
24.48% |
Not Sure |
9.37% |
30. If you answered yes to the previous question, will you continue to utilize a remote workforce more than you previously had when New Jersey is back open for business?
Answered: 412 Skipped: 1,008
Yes |
25.73% |
No |
44.17% |
Note Sure |
30.10% |
31. How will your physical workspace be affected as a result of COVID-19? (Check all that apply)
Answered: 1,076 Skipped: 344
We will need structural changes in implement social distancing |
6.69% |
We will need a larger footprint |
2.97% |
We will need a smaller footprint |
1.21% |
We will continue or expand remote working |
7.25% |
We anticipate increased costs for sanitizing |
23.33% |
We anticipate increased costs for PPE |
20.26% |
Our physical workspace will not impacted |
28.81% |
Other (please specify) |
9.48% |
32. Do you anticipate needing any kind of regulatory relief in order to reopen your business?
Answered: 1,095 Skipped 325
Yes |
9.50% |
No |
27.12% |
Not Sure |
34.34% |
My business did not close |
29.04% |
33. What regulatory hurdles or relief could impede your ability to reopen?
Answered: 992 Skipped: 428
Permits |
7.76% |
Licenses |
4.74% |
Government Contract(s) relief |
3.13% |
None |
19.46% |
Not Sure |
28.23% |
My business did not close |
39.72% |
Other (please specify) |
5.85% |
34. What impact will your supply chain have on the ability for your business to operate post COVID-19 (Check all that apply)
Answered: 1,063 Skipped: 357
Delay in time to receive needed products/inventory |
44.59% |
Availability of products/inventory |
39.23% |
Increased cost of products/inventory |
34.71% |
No impact from our supply chain |
31.42% |
Other (please specify) |
5.55% |