New Report Shows Nearly 60% of Louisiana Small Businesses In Danger of Closing as a Result of COVID-19 Effects

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BATON ROUGE, La. (press release) – New Louisiana data in a report published by Main Street America, a program of the National Trust for Historic Preservation, reveals nearly 31 percent of small businesses in Louisiana responding to the survey are at risk of closing permanently over the next two months. That figure jumps to nearly 60 percent over the next five months as a result of the effects of closures during the COVID-19 pandemic. Furthermore, 58 percent of Louisianans employed by small businesses may face unemployment. Nationwide, nearly 66 percent of small businesses face permanent closure in the next five months with more than 72 percent of employees facing unemployment.

“These small business, the owners and employees, are the life blood of Louisiana’s Main Street communities. Small business owners can only cut so much before the losses in revenue start drastically impacting their ability to remain open and serve the people of Louisiana,” said Lieutenant Governor Billy Nungesser. “It’s imperative we call on Congress to address critical voids in the CARES Act to fund those organizations that provide the technical assistance our small businesses will need to get back on their feet once the economy reopens. Programs like the Main Street America and the Louisiana Main Street Network will be needed now more than ever.”

Findings from business respondents in Louisiana Main Street districts to the Main Street America’s Small Business Survey show:

  • 70.9% are locally-owned
  • 46.2% have been in business more than 10 years
  • 81% have suspended storefront operations
  • 62% do not have an online sales component to produce a revenue stream
  • 69.2% report a loss in revenue of more than 50%
  • 61.5% report a loss in revenue of more than 75%
  • 49.6% are concerned with how they will pay this month’s rent/mortgage
  • 30.8% are at risk of closing within three months
  • 59% are at risk of closing within five months

For some Louisiana Main Street Directors and small business owners, the temporary closures will be a financial hardship, while others say they are trying to stay positive through the adversity.

“The City of Denham Springs Main Street is facing devastation. Our two restaurants closed because there wasn’t enough takeout business. They survive on the visitors that shop to stop and eat. We are hoping they will reopen. Some shops are saying they can’t pay their rent and some shop-owners depend on their income to totally support their family. We are trying to steer shoppers to online ordering and curbside delivery. It is not enough sales to sustain the stores,” said Donna Jennings, City of Denham Springs Main Street Director. “Our Main Street survived the 2016 flood through grit and determination and helped each other gut shops while others cooked meals. The difference is they had hope and could see the end of the tunnel even if they acquired a lot of debt. Being closed down means there isn’t a light at the end of the tunnel. They have no idea when the virus will slow down enough to reopen. Our village is like a family. We need hope and help.”

“Houma Main Street is at ground zero. We had 13 restaurants in the Houma District. Today only three are open from 11 a.m. – 2 p.m. curbside and one will deliver,” said Anne Picou, Houma Downtown Development District/Houma Main Street Director. “Our retail is all closed. They have signage on their doors that say, ‘If you need something, please call and we will open for your service.’ Traffic is sparse. Our businesses were already hurting due to oil/gas work declining with the price of oil being so low and now COVID-19.”

“It makes me sad to see our community wanting to help but under the circumstances it’s very difficult to or even possible. I am working hard to support my employees and my customers. There are really no concrete solutions or answers and we don’t know when they will come. We are just trying to hang-in there,” said Alicia Broussard, owner of The Vanilla Bean in Crowley.

“It is definitely a sad time for my small business. The cash is flowing out to keep the business alive while it is closed. Besides another loan, which I’m uncertain I would be able to pay off, there seems to be no other way to keep the business alive without spending what I’ve saved up for the past four years,” said Chad Monceaux, owner of City Bar in Crowley. “It makes me sad knowing so many small businesses are like mine! Praying this all ends soon so we can all start our small businesses from scratch again.”

“Who would have ever dreamed we’d be proud to say our streets downtown are practically empty? It’s certainly not what we, as Main Street managers, have ever promoted, but in this case, it shows how merchants in downtown Winnsboro are doing their part to be responsible during the COVID-19 crisis,” said Kay LaFrance-Knight, Winnsboro Main Street Manager. “It’s a sad sight but one that we know is necessary for the time being. Suffice it to say, we’re all looking forward to the day when we can open our doors and celebrate a grand RE-opening for all our shops downtown.”

“We’ve been working ON the business instead of IN the business,” said Sara Lindley, owner of Brush a Blowdry Bar in Thibodaux. Danielle Stein, Thibodaux Main Street Director, points out Sara is focusing her attention on aspects of the business she didn’t have time for pre-coronavirus, such as renovations, updating systems, adding services for clients, increasing their social media presence with a variety of content, including video tutorials staying connected with their clients from a business perspective as well as a personal side, and have begun selling products through their social media pages and offering free delivery services.

The Impact of COVID-19 on Small Businesses report is based on the first and most extensive survey to date assessing the impact of the pandemic on small businesses, especially those that employ 20 or fewer people. Nearly 6000 small business owners responded to the survey, of whom 91 percent own businesses with staff of fewer than 20 people.

The report, released as the federal government races to address the worst financial crisis this nation has seen since the Great Depression, calls on Congress to fund the U.S. Small Business Administration and partner organizations like local Main Street programs and Chambers of Commerce to expand technical assistance to small businesses. These local economic development organizations act as critical connectors and educators for our nation’s smallest employers and can help ensure stimulus dollars reach these businesses. These programs not only play a vital role in stabilizing local economies throughout the crisis but will expedite the recovery process once the pandemic subsides.

 

 

 

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