The coronavirus pandemic has hit small businesses hard. According to recent data from Harvard University, the percentage of California businesses that closed during the pandemic stands at 35.9%. That ranks as the 11th highest small business closure rate among 45 states.
As of March 22, nationwide the number of small business was 35% below that of those that were operating in January 2020. The data also shows certain types of businesses suffered more than others. For example, 52.4% of small businesses in the hospitality and leisure sector closed during the pandemic.
The state that had the largest percentage of small business closures was Michigan with a 39.7% rate. Other states in the top 10 of small business closures include:
- Massachusetts 39.1%
- (tie) Alaska 38.9%
- (tie) Maine 38.9%
- Colorado 38.8%
- Connecticut 38.5%
- New Jersey 36.9%
- (tie) Rhode Island 36.5%
- (tie) Illinois 36.5%
- New Mexico 36.2%
In February, Yelp reported that 15,000 businesses closed in Los Angeles County alone. About half that number aren’t expected to reopen. Many of the closed businesses were small operations. Smaller businesses often have less money available to keep operations afloat and may not have as strong of relationships with local banks.
Now that California plans to fully reopen June 15, it will be interesting to see how many small businesses return as the economy bounds back.