Closed sign. (Tim Mossholder, Pexels.com)
Almost half of British Columbia businesses that are temporarily closed are not confident in their ability to reopen.
This is among the findings from a BC Chamber of Commerce survey.
Four in 10 businesses surveyed say they can only continue to operate for up to three months under the current restrictions.
For businesses temporarily closed, the future is similarly dire, with only half (or 53 percent) of the respondents expecting to reopen once the restrictions are eased on workplace operations, while 38 percent are unsure, and eight percent will not reopen.
The survey polled 1,284 member-businesses of the BC Chamber of Commerce, the Greater Vancouver Board of Trade, the Business Council of British Columbia, and other partners, with the assistance of the Mustel Group.
Other key findings:
The pandemic caused immediate steep revenue declines but conditions continue to worsen, as respondents monitor their cash flows and operational expenses.
- Roughly half of all businesses (54 percent up from 48 percent in the first survey) state they have experienced revenue decreases of 75 percent or more while two-thirds (66 percent) have had revenues drop by 50 percent or more.
- The top operating cost or expenses were wages (64 percent) followed by rent (54 percent), taxes (34 percent), and goods and supplies (32 percent).
- The majority of businesses (58 percent) are spending 10 percent or more of operating expenses on rent, with 42 percent spending 20 percent or more. The proportion of wages or rent as a function of overall costs vary depending on firm size, sector, geography, and other factors.
Many of the businesses surveyed also say that government programs have provided some relief, but many are still left out.
They say they are concerned about the speed and scope of programs that support cash flow.
- Just over half of businesses believe the federal government programs announced to date will be helpful once implemented, but they are not helpful for 33 percent of businesses, primarily because they do not qualify for any programs or provide enough/timely cash flow relief.
- Similarly, one-third of businesses do not find the provincial programs helpful, for the same reasons as federal programs.
- Businesses with under five employees are least likely (49 percent) to find federal programs helpful, primarily because they do not qualify.
- Only one-third of businesses (34 percent) are confident they will qualify for the 75 percent wage subsidy program, while 21 percent are unsure.
- Reasons for not qualifying include: do not have employees on payroll (46 percent), revenue has not declined enough (28 percent), employees laid off (13 percent), business shut down (11 percent), seasonal revenue (11 percent) and start-up or pre-revenue company (10 percent).
Meanwhile, many businesses are not confident in their ability to restart or whether consumers will return.
- Key challenges to recovery identified are attracting customers/revenue (79 percent), having enough operating cash (55 percent), and rehiring staff (28 percent).
- If revenue is the key challenge, half of businesses are unsure what percentage of typical sales or revenues will be required to restart their business, with estimates ranging from less than 30 percent to more than 70 percent.
BC Chamber of Commerce president and CEO, Val Litwin, said that while government programs are helping businesses, more supports are still needed.
“Entrepreneurs are saying ‘there’s a survival runway here’ and ‘this is exactly what I need to get through this crisis,’” Litwin added.
“How (the) government listens and responds to the business community in the coming weeks will be the game-changer in terms of economic recovery.”