70.8% of Small Business Owners Report Sales Decline Due to COVID-19

Small Business Association Survey... "Psychological Stress Such as Anxiety and Depression Also Present"

It was found that 70.8% of small business owners experienced a decrease in sales this year due to the novel coronavirus infection (COVID-19). On the 27th, the Korea Federation of Small and Medium Business (KSMB) announced the results of the 'COVID-19 Related Impact Survey on Small Business Owners,' conducted on a total of 1,018 small business owners. This survey was conducted by Beyond Research from October 19 to November 5 at the request of the KSMB, targeting small business owners engaged in various industries such as retail and wholesale, accommodation and food services, education services, and leisure services.

◆ Small Business Sales Decreased by 37% = This year, to confirm the damage caused by COVID-19, when asked about changes in the business environment, 63.7% of respondents said it had worsened or expected to worsen. The change in sales was the most significant among business management conditions, with 70.8% of respondents reporting a decrease in sales compared to the previous year. In these cases, the average sales decrease rate was calculated at 37.4%.

Regarding the outlook for COVID-19 recovery, 45.3% expected it to take about 1 to 2 years, which was the highest proportion, but a high rate of 39.2% also anticipated a prolonged period of more than 2 years.

◆ Biggest Burden is Rent = To understand the direction of support policies, when asked about the most economically burdensome fixed costs, rent (68.8%) was the highest, followed by labor costs (54.1%) and various taxes (50.6%), which accounted for the majority of cost burdens. Among businesses that applied for support programs, 43.8% received support, 10.2% did not receive support, and 44.1% did not apply at all. The received funds were mainly used for rent (47.3%), labor cost payments (19.1%), and personal living expenses (13.5%).

Regarding the current level of COVID-19 support for small business owners, 53.5% of respondents felt it was insufficient, and 37.2% withheld their response. The opinion that the support was temporary rather than a fundamental solution was the highest at 45.9%, and 39.3% felt that the actual support funds or benefits were insufficient compared to business demand. Policies deemed necessary for small business owners in the future included emergency management stabilization loans for small business owners (56.5%), rent support (51.2%), and direct and indirect tax benefits or reductions (47.0%).

◆ Psychological Stress such as Anxiety and Depression = Using an anxiety disorder screening tool to measure the degree, a high level of perceived worry and nervousness/anxiety was observed. In particular, 17.1% of respondents were classified as being in the anxiety risk group. In terms of depression, the analysis showed high levels of perceived fatigue, lack of interest or pleasure, hopelessness, and insomnia. Based on these results, 20.2% of all respondents were classified as being in the depression risk group.

The degree of life disruption experienced by small business owners due to COVID-19 was found to be quite high compared to previous incidents such as the MERS outbreak or the Sewol ferry disaster. Kim Im-yong, acting president of the Korea Federation of Small and Medium Business, stated, "The damages and situations experienced by small business owners due to COVID-19 have been empirically investigated," adding, "Since the rent burden on small business owners is significant, urgent support measures such as direct rent support and a substantial expansion of emergency loans for small business owners must be promptly implemented."

This content was produced with the assistance of AI translation services.