Nearly half of business owners anticipate it will take 10 months or longer to generate revenues comparable to pre-COVID profits, while nearly 12% say they will never make up for those missed earnings, according to a new survey by the New Jersey Business & Industry Association.
NJBIA’s Reopening Survey, conducted in partnership with Focus NJ, also found that 65% of responding businesses are experiencing an overall decrease in revenue.
“These results shine a brighter light on the impacts of New Jersey’s economic shutdown and a slow reopening process,” said NJBIA President and CEO Michele Siekerka. “While it’s a positive that businesses are getting the opportunity to reopen, their limited capacities and other factors are ensuring a longer road to recovery.”
Nearly 16% of respondents say it will take 10-12 months to generate revenues comparable to pre-COVID-19 profits, while more than 25% say it will take more than a year. Nearly 8% claimed they will need more than two years.
To accommodate for their lost revenue, 61% of respondents said they sought additional funding by taking out a loan, tapping credit lines, seeking government aid or increased donations.
Percentages of other adjustments thus far made by business owners include:
- 45% reduced expenses and overhead
- 38% tapped into business reserves or personal savings
- 29% reduced workers’ hours
- 28% delayed bill payments
- 21% reduced workers’ pay, which includes reduction in salary for owner and executives
Thus far, 33% of businesses said they have laid off at least one employee, while 32% of businesses have furloughed at least one employee. Of those, 63% continued to offer health benefits to furloughed employees.
“These findings indicate that little has changed since our Recovery Survey in April,” said Focus NJ Executive Director Nicole Sandelier. “Businesses are experiencing severe financial losses and have taken extensive action to give their company a fighting chance for survival during this economic downturn. Hopefully, their measures are enough.”
The survey also chronicles the level of strain business owners are feeling during their reopening, including:
- 53% rated generating enough profit to keep their business open as burdensome or very burdensome.
- 39% rated meeting payroll costs and/or payroll taxes as burdensome or very burdensome.
- 42% rated paying rent, income/property taxes, loans and utilities as burdensome or very burdensome.
- 40% rated ensuring worker safety and/or purchasing personal protective equipment as burdensome or very burdensome.
- 35% rated complying with labor mandates as burdensome or very burdensome.
- 32% rated liability lawsuits and/or concern for future liability lawsuits related to COVID-19 as burdensome or very burdensome.
Full results of NJBIA’s Reopening Survey can be found here.
The survey was conducted in partnership with Focus NJ from June 10 to June 22, 2020. A total of 743 respondents, comprised of NJBIA members and members from other partnering business associations, participated in the online survey.
Focus NJ – the Center for Economic Research and Workforce Solutions – is a nonpartisan, nonprofit research foundation launched by NJBIA in February, 2020. It will administer deep analysis of public policies, industry trends and economic indicators that impact New Jersey’s overall affordability, workforce and competitiveness.