2020 Review: Minneapolis Small Business Statistics
Since the onset of COVID-19, different sectors globally felt the pandemic's impact, with small businesses being significantly affected.
Most of them closed down, while those that remained operational forced to partner with the best Minneapolis SEO company to operate virtually. Small companies are getting hit hardest by the economic fallout of the pandemic.
According to statistics, the situation is worsening everyday, especially with businesses that closed down and are yet to reopen.
The 2020 Small Business Profile
In Minnesota, small businesses are among the leading sectors that employ most people, with the figure standing at 1.3 million, representing 46.9% of the private workforce as of January 2020.
However, the numbers have since deteriorated, with COVID-19 being the contributing factor. In 2019, the fourth quarter of the year had an annual rate of 1.6%, with Minnesota's 2019 overall growth rate standing at 1.4% at the time.
As of April 2020, Minnesota alone had an unemployment rate of 8.1%, up from 3.2% in April 2019, though lower than the national unemployment rate of 14.7%.
Generally, small businesses in Minnesota have a shared percentage of all enterprises standing at 99.5%, over 526,000 small and medium-sized companies included in the figures.
In a study conducted by the National Bureau of Economic Research, more than 43% of small businesses have closed in the United States due to COVID-19, leaving more people unemployed.
The survey suggests that the increase in the unemployment rate resulted from reduced employment opportunities by 40% since the beginning of the year. The study further states that economic crisis often affects the cash-flow of any given company.
In this case, businesses that have cut down operational costs and those that remain shut are experiencing reduced revenue hence at risk of permanent closure due to the pandemic.
More Small Businesses Expect to Close at the End of the Year
COVID-19 restrictions play a vital role in protecting lives, but more should be done to revive the sector when small businesses are in question.
Typically, more than 70% of restaurants and other small enterprises are expected to close down if COVID-19 continues to rampage the industry. With the high number of US employment dependent on small businesses, the worst is yet to come if the pandemic isn't contained in time.
Following the March 13 emergency order, there was a significant drop of 27% in new business applications nationwide, which mostly concentrated on small businesses.
In Minnesota, small businesses contribute heavily to providing jobs for thousands and promoting economic growth. The 2017 US Census Bureau shows that Minnesota has a large population depending on small businesses like most States. This suggests that the closure of small companies has dramatically impacted the lives of millions in the US alone.
How Minnesota is Responding to the Impacts of the Pandemic
Small businesses received a forgivable loan amounting to $349 billion to help this industry persist through the pandemic. Congress granted another $310 billion, with Minnesota companies getting $9 billion in the first round of disbursement.
Between March and May alone, the Minnesota Department of Employment and Economic Development reported over 640,000 cases of unemployed Minnesotans. Due to more businesses' low revenue and closure, the numbers are expected to increase continuing into 2021.
Within April, Minnesota's labor force experienced a drop of 1.5%, suggesting that most people are giving up searching for job opportunities. The labor force percentage surpassed 69.1% as of May, including those looking for work. In March, nearly 48,000 workers gave up looking for employment, and the number is increasing each passing day.
Dawn for a Greater Beginning
The pandemic has brought more harm to small businesses, especially startups and those that never prepared for such a phenomenon. Still, it gave small businesses a chance to discover practical approaches to promote their operations.
Online activities have boomed and as a business, having an online presence is crucial. The utilization of Minneapolis SEO services enable owners to increase online visibility and thrive in the market readily.
The pandemic is increasingly impacting small businesses in Minneapolis, and the numbers suggest that the situation is worsening fast. However, considering marketing agencies, Minneapolis has proven to slow the impact as operations continue online for some businesses.
Nevertheless, immediate action must be put in place to help small businesses in Minnesota and around the country.