More owners are permanently shutting their doors after new lockdown orders, realizing that there may be no end in sight to the crisis, the New York Times reported. It was harrowing enough for small businesses — the bars, dental care practices, small law firms, day care centers and other storefronts that dot the streets and corners of every American town and city — to have to shut down after state officials imposed lockdowns in March to contain the pandemic. But the resurgence of the virus, especially in states such as Texas, Florida and California that had begun to reopen, has introduced a far darker reality for many small businesses: Their temporary closures might become permanent. Nearly 66,000 businesses have folded since March 1, according to data from Yelp, which provides a platform for local businesses to advertise their services and has been tracking announcements of closings posted on its site. From June 15 to June 29, the most recent period for which data is available, businesses were closing permanently at a higher rate than in the previous three months, Yelp found. During the same period, permanent closures increased by 3 percent overall, accounting for roughly 14 percent of total closures since March. Researchers at Harvard believe the rates of business closures are likely to be even higher. They estimated that nearly 110,000 small businesses across the country had decided to shut down permanently between early March and early May, based on data collected in weekly surveys by Alignable, a social media network for small-business owners. Christopher Stanton, an associate professor at Harvard Business School who was one of the researchers, said it was difficult to accurately gauge how many small businesses were closing because, once they shut their doors for good, the owners were hard to reach. He added that it could take up to a year before government officials knew the true toll the pandemic was taking on small businesses. Read more.
In related news, the House Small Business Committee will hold a hearing tomorrow at 1 p.m. ET titled "Long-Lasting Solutions for a Small Business Recovery." According to the committee, the hearing will explore efforts to stimulate small business growth following the Great Recession, applying those programs to the COVID-19 crisis, and new ideas to help industries that have been disproportionately impacted by COVID-19. Click here for a list of witnesses and a link to access the live webstream tomorrow of the hearing.
