- Shutting down for good. Thousands of small companies in the US—maybe more than 100,000—have folded permanently since early March, citing declining sales, shortages of cash, and trouble keeping employees safe. That’s a big problem because small businesses account for so much of the country’s economic activity and employment. [NYT]
- Not enough support. When the National Federation of Independent Business surveyed small companies recently, more than 20% of those that had gotten federal emergency loans said they still had to lay off at least one employee. Around the same share said their businesses would last fewer than six months if current economic conditions persist. [Axios]
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- Why it matters. The sectors most affected by the crisis—manufacturing, retail, restaurants—could take more than five years to get back to precrisis levels, according to our research. Those sectors are ones in which small businesses generate large shares of GDP. In many ways, the health of those sectors depends on the health of small business.
- Adapt to survive. Even before the crisis, many small businesses had slim margins, relatively high fixed costs, high inventory, and lots of debt. Now many have lower revenues and added costs. But there are operational and technological changes that can make a difference. Here’s how larger companies and governments can help small businesses afford them.
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