An overwhelming majority of the Kenai Peninsula’s small business owners have experienced disruptions in their business and a decline in revenue due to the outbreak of COVID-19, the disease caused by the novel coronavirus, according to the results of a survey conducted by the Kenai Peninsula Economic Development District.
The survey was open from March 20 to March 27 and was completed by 721 businesses across the Kenai Peninsula Borough. It included 12 questions, as well as an opportunity to make additional comments or express additional concerns.
Tim Dillon, executive director for KPEDD, told the Clarion on Saturday that, while he didn’t know what portion of the entire business community that sample size represents, he’s confident it’s a “big chunk.”
In addition to the survey results, Dillon said that he had 45 pages, single-spaced, worth of comments from the businesses that participated. Many of the comments, Dillon said, were business owners expressing their fears about the uncertainty that they currently face.
“It was very depressing on one level, but it was also very encouraging on another,” Dillon said about reading through the dozens of pages worth of comments. “I was so pleased with the number of businesses that, their number one concern was taking care of their staff and taking care of their customers. You know, that’s what Alaska is all about, taking care of each other, and I think that’s really, really important.”
Dillon said that KPEDD would be sharing the results of the survey with policymakers on the local, state and federal level in order to give them an accurate idea of the economic impacts seen on the peninsula.
“What we’re going to do is make sure the information is in the decision-makers’ hands and making sure that our businesses know that this is where they fit in on some of this stuff,” Dillon said.
Question 1: Which sector best describes your business?
The most common response to this answer was tourism/hospitality, with 28.2% of respondents in that category. The second-most common was wholesale/retail trade at 10.3%. Overall the 721 respondents represented 19 different business sectors.
“When we go out there and we talk to people about how diverse a borough we are, there it is right there,” Dillon said. “When you see all those different groups that have participated, that’s pretty special.”
Question 2: How many people does your business employ?
Over 400 of the respondents reported employing between one and five people. Around 90 reported employing zero people, 80 reported six to 10 employees and 50 reported having between 11 and 20 employees. Businesses employing 21 more people accounted for about 50 of the respondents. Dillon said that, based on the comments he received, the potential economic hardships brought on by the virus can be particularly scary for those smaller businesses that only employ a handful of people.
Question 3: How many people does your business employ during the peak season?
Results for this question are similar to the second question, with a larger portion of the respondents employing more than five people during the peak season for their business and fewer respondents employing five or less during the peak season.
Question 4: Have you experienced any disruption in business due to COVID-19?
The overwhelming majority of respondents, 91.9%, said that they have experienced disruption due to the outbreak of the disease.
Question 5: Has your business experienced a decline in revenue due to COVID-19 in the last 30 days when compared to the same period in 2019?
Most respondents, 84%, said that they have experienced a decline in revenue.
Question 6: If yes to question 5, please estimate the decrease.
While the percentages given by respondents vary, the largest number, over 120, estimated a 91-100% decrease in revenue due to the virus.
Question 7: How much do you project your revenues will change in the first half of 2020 compared to 2019?
Nearly all of the respondents projected a decrease or significant decrease in their revenues. Fewer than 50 respondents projected no change to their revenue, and none projected an increase.
Question 8: Have you made any employment reductions due to COVID-19?
A little over half of respondents, 57%, said that they have not made employment reductions, while 43% said that they have reduced their employment numbers.
Question 9: Do you expect to make employment cuts in the future due to COVID-19?
Only 23.9% of respondents said that they did not expect to make employment cuts. Most were unsure at 39.3%, and 36.8% did expect to make reductions at some point.
Question 10: Has your supply chain been disrupted?
About 300 respondents answered “yes,” while about 200 each either answered “no” or that the question was not applicable to their business.
Question 11: Have you experienced disruptions from vendors and service providers?
The answers to this question were similar to the previous question, with about 300 respondents answering “yes” and 200 each answering “no” or “not applicable.”
Question 12: Is your business at risk of closing permanently because of the impact of COVID-19?
Only 31.7% of respondents were able to say that their business was not at risk of closing permanently. About a quarter, 24.2%, said yes, their business is at risk of permanent closure. Slightly less than half, 44.1%, were unsure.
KPEDD will likely send out another survey after a couple weeks to get a sense of how things have changed.
“One of the things that we’re not touching on yet that we have to make people aware of is that the mental health wellness impact out of this is probably going to be worse than the virus,” Dillon said. “People haven’t even really started to have things set in, but as I read some of these comments it makes a lot of sense. Whether you’re 30 years old or 65, 70 years old, you’re sitting there now and you’re looking at your life savings and what you’ve built, and some of it is disintegrating right before your eyes and there’s not a darn thing you can do about it. And that’s scary.”
Business owners can call Dillon at 907-283-3335 with any questions they have about their business in the wake of the new coronavirus outbreak. Dillon also recommended reaching out to Cliff Cochran with the Alaska Small Business Development Center at 907-260-5643.