NJ Business Survey: Reopening and Surviving Aren’t the Same Thing
If New Jersey businesses were given the green light to open their doors and operate under social distancing guidelines, most owners in the state believe they could follow the rules — but making enough money to survive is another story.
In a New Jersey Business & Industry Association survey of its members, more than 50% of the 1,359 respondents said they would need at least 75% of their typical customer/client base in order to break even in a given month.
If a partial reopening — 50%, the NJBIA survey assumes — of a restaurant or shop were granted permission to open once again to the public, 21% of businesses believe they'd never be able to generate a profit. On the other hand, 50% of businesses believe their revenues can reach pre-COVID-19 profits within a year.
The survey didn't specifically ask businesses whether or not they would open the doors if granted permission by the state, but 70% of owners said they're able to operate safely under CDC social distancing guidelines — customers remaining 6 feet away from others, for example.
"Reopening is one thing, sustainability is another," said NJBIA President and CEO Michele Siekerka. "I think it's safe to say that there will be a numerous businesses, that if they can't open to a certain capacity, they're not going to be able to open."
Opening to the public in a way that accommodates rules meant to stem the spread of COVID-19, Siekerka noted, could mean capital improvements for certain businesses, such as added barriers or changes to the way customers enter and exit. A reopening will likely also include the need for employees to wear personal protective equipment, which is an added expense. Businesses will be "doubling down" on sanitizing efforts as well, she added.
"They want to present an environment that is going to be viewed and observed as being a safe place to be, so that they garner the credibility for people to come back," Siekerka said.
Financial assistance waiting game
NJBIA's Business Recovery Survey was conducted between April 23 and 28. At that time, 74% of surveyed employers had applied for the federal Paycheck Protection Program. Of that group, 65% said they had not yet received their funding that helps pay for payroll costs, rent and other business-related expenses.
Meanwhile, 78% percent of businesses who applied for a Small Business Emergency grant or loan from the New Jersey Economic Development Authority had not received their funds.
"Meeting payroll costs" was sited among employers as the top struggle for their businesses, followed by "paying the rent," "ensuring worker safety," and "repaying existing loans on time."
Siekerka said the NJBIA continues to advocate for more flexibility within the PPP — to assist businesses not only during their closure or slowdown, but in their recovery mode as well.
When asked what percentage of their typical in-person workforce is needed in order to operate productively, 27% of employers said they'd need 100% of their workers. Another 15% said they'd need at least 75% of their workforce to get the job done.