The state’s business owners believe they could reopen and operate safely under COVID-19 social distancing, but fear they would be unable to break even or turn a profit, according to a new survey by the New Jersey Business & Industry Association.
According to the NJBIA Business Recovery Survey, 70% of business owners said they would be able to reopen under Centers for Disease Control and Prevention guidelines for social distancing.
But a majority said they would need more than half of their prior client or customer base to break even in any given month — 29% saying 50-74% of customers would be needed, 36% saying 75-99% and 18% saying 100%.
In addition, a 50% capacity reopening could mean it would take more than a year to generate a profit — if they ever could — many said. Of the respondents, 23% said it would take more than a year, 6% said more than two years and 21% said they never could.
“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,” NJBIA CEO and President Michele Siekerka said in a prepared statement.
Almost two-thirds of companies, 66%, said their revenue had decreased during the pandemic, and another 27% said revenue had vanished entirely. Only 6% reported normal revenue levels.
Workers were paying the price for those shrunken revenues, as 53% of companies said they had to reduce hours or furlough or lay off workers to compensate. About 11% of business owners said they had tapped reserves or personal savings, while another 11% have sought outside funding such as additional loans or government aid.
Nearly a third of the respondents, 32%, said they had laid off at least one employee, while 8% said they had laid off 10 or more.
“Some of our additional data focusing on revenues and financial assistance also reveal great challenges,” Siekerka said. “However, now, knowing the true needs and concerns of our businesses in even a partial reopening allows us to work toward solutions and an effective plan of action for the reopening of our economy.”
The survey found that 36% of respondents had been forced to close because of Gov. Phil Murphy’s executive orders closing non-essential businesses. Of those, 70% saw the closure as temporary, while 29% were not sure if they would be able to reopen. Likewise, 70% of those businesses forced to close locations were operating remotely, but with financial losses, while 18% were voluntarily closed completely and 10% were continuing operations as normal.
Of those surveyed, 74% had applied for the federal Paycheck Protection Program, but only 30% of the applicants had received funding at the time of the survey in late April. Another 65% said they had not yet received any money, while 5% said they were not approved for the program.
Finally, businesses said meeting payroll costs, at 59%, paying the rent, at 44%, and ensuring worker safety and repaying existing loans, at 11% each, represented the greatest concerns for the future.
NJBIA surveyed 1,359 respondents in the New Jersey Business Coalition, which includes NJBIA and other partner business associations.
