Chambers Ireland and our nationwide network of chambers has today (30th April 2020) published results from a survey of the Irish business community. This survey seeks to quantify and highlight the impact of COVID-19 on businesses in towns, cities and regions across the country.
The third in a series, the survey has over 1300 responses and was conducted between the 24th and 28th April 2020.
The previous Chambers Ireland survey results, published on the 9th April, found that 84% of businesses expect revenue to decline by in excess of 25% in the next three months, up from 73% two weeks earlier. Fears about cashflow and liquidity were the greatest concerns of micro-enterprises (<10 employees) with closures and staffing being a concern for larger businesses across many sectors.
The headline results of today’s survey are:
- 85% of businesses have closed to some degree with,
- 27% have scaled back activity
- 24% have front of house closed with staff working from home
- 34% have shut completely
- Only 15% remain open
Timeline to Reopening
- Most businesses say they will need at least two weeks’ notice to reopen
- 25% of businesses have said that it will take at least a month
- There is a small minority in agri-food, tourism, and hospitality which will have to wait until next year to reopen
- For those businesses that are closed, typical weekly overheads are approximately €2,000
- 25% of firms have noted that overheads are greater than €5,000 per week
Cost of Reopening
- Of those that need to restock, the typical amount required is €3,000 with 25% of firms having to spend over €8,000 on restocking
- For physical distancing measures, the typical cost will be €2,000, with 25% spending in excess of €5,000
Decline in Revenue
- Of the businesses who have been hardest hit (those which have lost more than half of their revenue for the next three months), 60% project that their 2020 annual earnings will be less than half of what they were expecting at the start of the year
- 68% of businesses have invoices outstanding, with €40,000 being the median amount owed
Speaking this morning, Chambers Ireland Chief Executive Ian Talbot said, “With lockdown measures due to expire on the 5 May, it is critical that Government engage with businesses on how local economies. The purpose of this latest survey was to help us understand not only how deep the economic impact has been on the business community, but what supports they will need to re-open as the restrictions are phased out.
While the economy was shut down to a large degree in a matter of days, the process for reopening will not be as straightforward. Most of those responding to our survey have noted they will need at least two weeks to reopen, with approx. 25% noting that they would need at least four weeks. There are also likely to be significant costs involved in reopening businesses, which can be attributed to re-stocking and putting appropriate social distancing measures are in place.
The last few weeks of closure have already cost businesses in excess of an average €10,000, in addition to the projections of revenue likely to be lost over the course of the rest of the year. For the median retailer that has closed, the costs of restocking before they can open will be €1,600, the costs of implementing physical distancing measures will be another €1,000. It will take them a week to reopen, which will cost another €2,000 in overhead costs.
Of the businesses which have been hardest hit (those which have lost more than half of their revenue for the next three months), 60% project that their 2020 annual earnings will be less than half of what they were expecting at the start of the year. 68% of businesses have invoices outstanding, with €40,000 being the median amount owed, with only a quarter of business owners predicting that the majority of their invoices outstanding will be paid.
With the above in mind, the question for many business owners is soon going to become not ‘Can we keep going?’, but ‘Can we afford to reopen?’
This data verifies what we have been telling Government over the past few weeks – we need a clear plan for reopening the economy. This includes advance notice of the dates that various sectors will reopen, a clear strategy on what sectors will reopen first, information on what protocol will need to be in place and whether support will be available to financially assist businesses to reopen.
The business community needs direct support from Government if it is to reopen. The objective of many of the supports to date, such as the Wage Subsidy Scheme, has been to ensure that employees are retained on payroll for when the economy reopens.
What the business community needs to see now is a similar approach to ensuring that overheads, other than wages, receive some form of subsidy or grant. Without this aid, the chance of businesses successfully reopening and maintaining employment is significantly reduced.”