Data: U.S. Census Bureau; Cartogram: Andrew Witherspoon/Axios

New findings from the U.S. Census Bureau paint a bleak and detailed picture of how coronavirus is hitting small businesses.

The big picture: Half describe major suffering, nearly half don’t have enough cash to go more than a month, and the worst-hit state — Michigan — also is a key battleground for the November election.

  • The data released Thursday is the first installment of a nine-week survey of small businesses that the Census says may be used to help policymakers, businesses and researchers address challenges brought on by the pandemic.

Why it matters: Small business is at the heart of the U.S. economy. The virus' damage varies by state and industry, but majorities of small businesses reported revenue declines, cuts to employee hours and requests for federal aid.

  • Small businesses — firms with 500 or fewer workers — make up 99.7% of employer companies in America, according to the Small Business and Entrepreneurship Council, an advocacy group.

How it works: The Census Bureau is sending the survey to roughly 885,000 non-farm, single-location employer businesses with fewer than 500 employees and receipts of $1,000 or more in 50 states, the District of Columbia and Puerto Rico.

What they're saying: Thomas Sullivan, vice president of small business policy for the U.S. Chamber of Commerce, tells Axios the survey reflects what he's hearing.

  • "There have been more calls of sheer desperation in the last two weeks than in the last two months," Sullivan says, choking up as he describes his conversations with small business owners.
  • "I'm not talking about equity ownership or cashing in 401(k)s. I'm talking about food stamps, cutting down to one meal a day, not knowing if someone will have access to pay this month."

Impacts vary widely by sector. The findings were worst for the "food and accommodation" category of small businesses that included mom-and-pop restaurants, coffee shops, bars and B&Bs: 83.5% say the coronavirus is having a large negative effect on them.

  • Around one in three small businesses in construction, finance and utilities sectors said the same.

Between the lines: In a presidential election year, it's noteworthy that four large battleground states — Florida, Ohio, Michigan and Pennsylvania — are among the states where small businesses report being hit hardest.

  • Michigan's small businesses have taken the biggest hit of any state, with 65% saying the virus had a large negative effect on their business. In Michigan, 80% report decreased revenues, while 59% have had temporary closures and 35% are cutting the number of paid employees.

Other states or territories hit particularly hard are New York, New Jersey, Massachusetts and Puerto Rico.

  • New York and New Jersey have the most COVID-19 cases and deaths compared to other states — numerically and per capita, per the New York Times.
  • While the vast majority of small businesses have yet to miss scheduled loan or other payments so far, small businesses in New York are more likely than in other states to say they had missed a non-loan payment (35%).

By the numbers: Nationally, 74% of the small businesses surveyed said they had revenue declines because of the coronavirus.

  • 41% had to close at least one of their business locations for at least one day.
  • Only 17% of small businesses report having enough cash on hand to maintain business operations for three months or more; 48% only have enough for four weeks or less.
  • 75% of small business requested assistance through the Paycheck Protection Program; only 38% had already received it.
Data: U.S. Census Bureau; Chart: Axios Visuals

Go deeper

Updated Jul 15, 2020 - Axios Events

Watch: Small business recovery in Texas

On Wednesday July 15, Axios hosted the third of a six-event series on small business recovery across America. Media Trends author Sara Fischer and Cities author Kim Hart led conversations with Austin Mayor Steve Adler and Mint Event Design Founder Carolina Villarreal on how businesses have adapted to a changing world.

Mayor Steve Adler discussed his decision to cancel SXSW this year, how the city is supporting small businesses through this period, and lessons learned in reopening the economy.

  • How the city is allocating its resources in the community: "We've taken some of the reserves that we have as a city and made direct payments to residents that might not otherwise qualify for the federal funding. We've dedicated more than $30 million in federal and local emergency funding to support businesses and industries impacted by the crisis."
  • The three lessons in reopening the economy: "One, you don't open the economy until you actually have all the testing and contact tracing in place...[Second], you shouldn't go from one phase to the other until you can evaluate between each phase...[Third], when you open up the economy, you can't open it up in a way that looks like what the economy used to look like."

Mint Event Design Founder Carolina Villarreal discussed how the pandemic has changed the events business and how she's pivoted to using digital tools.

  • On how her events business has changed: "[I wondered] how am I going to serve my clients since they can't have parties? So I started to prepare kits I can drop at the doorstep...So I use those [social media] platforms and that just grew so fast..I had people calling me from out of state."

Axios Chief Revenue Officer Fabricio Drumond hosted a View from the Top segment with Head of Public Policy and Community Engagement for the Southwest Facebook office Ana Martinez, who discussed Facebook's recent research on the global economic impact of coronavirus.

  • "We found that 65% of U.S. operational small businesses feel optimistic. Forty-four percent expect cash flow to be a challenge in the next few months...Nearly a third of U.S. small businesses surveyed reported that they had reduced their workforce as a result of the pandemic. In some countries, 50% of businesses had to close."

Thank you Facebook for sponsoring this event.

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What a President Biden would mean for tech

Illustration: Eniola Odetunde/Axios

A Biden presidency would put the tech industry on stabler ground than it's had with President Trump. Although Biden is unlikely to rein in those Democrats who are itching to regulate the big platforms, he'll almost certainly have other, bigger priorities.

The big picture: Liberal Silicon Valley remains one of Democrats' most reliable sources for big-money donations. But a Biden win offers no guarantee that tech will be able to renew the cozy relationship it had with the Obama White House.

Virtual school is another setback for struggling retail industry

Illustration: Annelise Capossela/Axios

A virtual school year will likely push retailers even closer to the brink.

Why it matters: Back-to-school season is the second-biggest revenue generating period for the retail sector, after the holidays. But retailers say typical shopping sprees will be smaller with students learning at home — another setback for their industry, which has seen a slew of store closures and bankruptcy filings since the pandemic hit.