Small businesses are bearing the brunt of the COVID-19 impact in Seattle. With the rise of social distancing, local businesses are withering on the vine. Uncertainty hangs over the city. Restaurants are slow or shut down entirely. Gyms are brightly lit and empty. Stores are quiet. When will it end?

As a Seattle-based recommendations site, Fresh Chalk has its finger on the pulse of small businesses. Anecdotes from businesses prompted us to take a closer look at the fallout. This week we surveyed business owners to understand how they’re being affected by the Coronavirus. The findings are staggering and the personal stories are heartbreaking.

Key Findings

80% of surveyed businesses in Seattle are seeing drops in demand , with 45% seeing a “significant” decrease.

, with 45% seeing a “significant” decrease. Wage cuts and staffing cutbacks are being considered by 60% of small businesses.

of small businesses. Closure is looming for 35% of small businesses in Seattle.

What business owners are saying:

“We’re short $20,000 for payroll this month”

“Anticipating a huge hit"

“Losing clients daily”

“Will force us to reduce employment”

“Customers are cancelling”

“I had to lay off my entire team”

“We may have to close soon and we need help”

“8 years of work down the drain”

Side note: we are also surveying consumer sentiment in Seattle. We’ve received hundreds of responses and plan to publish shortly.

Demand: 80% of businesses are reporting a drop in demand, with 45% seeing a “significant” decrease

When Seattle anchor businesses Microsoft & Amazon started issuing work-from-home mandates, consumer behavior changed immediately. Demand waned, with nearly half of businesses reporting significant drops in revenue. A restaurant shared, “Our event space is closed completely. Our restaurant is doing 40% of its normal sales. We are assessing whether it is financially viable to stay open.”

Outlook: 81% of businesses believe the situation will worsen

One popular spa reported that they were $20,000 short for payroll this month. A gym located near Amazon is planning to reduce their workforce. Maybe they’ll get a grant from Amazon to stay afloat? A successful catering company has been forced to lay off its entire staff.

Cutbacks: 60% of businesses are evaluating cuts to stay afloat

With slim margins and nonexistent reserves, small businesses are forced to act immediately. As employees and owners get squeezed, the ripple effect across the economy will deepen.

A local dance studio shared,

“There has been a great additional cost for cleaning materials and the manpower needed to keep our studios germ-free between classes. I have had more teachers calling in sick. We are telling them to stay home if they show even mild symptoms. That means I have to pay both the substitute and the regular teacher. My payroll expense for this quarter, maybe for the year, is going to be substantially higher than anticipated. I also have new dance studios under construction and the situation could cause delays in getting the projects done. We owe rent even if we're not built out yet. A major shutdown of the city would be a tremendous financial blow.”

Survival: 35% of businesses fear they will have to close altogether

For many, the sheer uncertainty puts cracks in the foundations of their business. One restaurant manager shared, “My employees want me to provide answers, and all I can say is ‘get an unemployment account started now,’ because I have no idea how much further this is going to go.”

The owner of a local entertainment company is now worried about putting food on the table. “All our planned Team Building groups are canceling...which is what feeds us.”

Some silver linings to the COVID-19 cloud



As awareness of the impact broadens, so does community support for businesses that are integral to our daily lives. One cleaning company shared, “Customers now working remotely are cancelling their cleanings because they'll be home. A lot of our customers have been awesome, though, and insisting on paying for the cleanings anyway.”

Keep an eye on the Fresh Chalk blog to learn ways you can support local businesses in your community without exposing yourself or others. Watch this space.

Methodology



The Fresh Chalk March 2020 SMB Survey was sent to over 1,000 small business owners in Seattle, with 60 responses. Here’s the breakdown of business categories as reported by the owners themselves: