SMALL BIZ IN CRISIS
Dire reopening report
A staggering one-third of the city’s 230,000 small businesses may never reopen once the coronavirus clouds lift, according to a grim new report.
Most small businesses have less than three months’ worth of cash reserves — a period equal to the length of the state’s COVID-19 shutdown, according to a 67-page study released Monday by The Partnership for New York City, a leading business group.
“That means that funds to restart, pay back rent and buy inventory are exhausted, leaving tens of thousands of entrepreneurs at risk, particularly business owners of color,” authors Kathryn Wylde and Natasha Avanessians wrote in their post-pandemic response, crafted with the help of 12 global consulting firms.
The report, which found that accommodation, food service and retail jobs are particularly vulnerable, noted that business owners face many hurdles to reopening, including high rents, regulatory burdens and taxes.
“Over the past decade, political forces have created a much more expensive and litigious environment for business that is no longer sustainable for those whose margins were narrow before the pandemic,” the authors said. “COVID-19 has changed the value proposition, since previous advantages such as foot traffic and easy access to the offices of clients and potential customers have diminished.
There were some bright spots in the report. Job vacancies are still at 200,000, even with the city’s 18 percent unemployment rate, although there’s a shortage of skilled workers in areas like accounting and business development.
The city’s tech sector survived the pandemic “relatively unscathed” and local startup companies like Clear that invented a health pass to verify a person’s COVID-19 status are poised to profit from the recovery.
Other highlights and recommendations from the report:
About 1 in 4 financial services employers intend to reduce their NYC footprint by a fifth, and about 16 percent plan to move jobs elsewhere.
Only 40 percent of Manhattan office workers will return by year’s end, and just 75 percent are expected to return full time in the future.
54 percent of city jobs can be done remotely, with some NYC companies no longer requiring new hires to live in-state.
Raising taxes for the wealthy could push the city’s highest earners — who account for 40 percent of the state’s tax revenue — to move elsewhere.
Hotels should be converted into supportive housing for homeless and affordable housing for the poor.