Parks Associates: 29% of SMBs Report Their Company Is At Risk Of Going Out Of Business Due to COVID-19
Recent research from Parks Associates‘ New SMB Landscape: Devices, Communication, Security, Support reveals nearly 29% of SMBs report their company is at risk of going out of business due to COVID-19. The public health crisis and months of shelter-in-place orders have had a dramatic impact on SMBs in particular. New SMB Landscape: Devices, Communication, Security, Support, a primary study of US SMBs, provides insights on technology adoption and needs among SMB owners and IT personnel and examines the changes taking place as a result of reduced budgets and broad-scale shifts to work from home.
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“SMBs at risk of going out of business are spending on technology products and services to transform their businesses to new conditions and overcome the existential challenges presented by the pandemic,” said Jennifer Kent, Senior Director, Parks Associates. “SMBs need their IT device vendors and service providers to be supportive and flexible, becoming trusted partners in pivoting their operations to new market realities.”
The COVID-19 outbreak has clearly weakened the financial position of SMBs. SMBs generally report an increase in expenses following the COVID-19 outbreak, a decrease in sales, and a decline in employee productivity. SMBs that are at risk of closure are more likely to report their spending on voice, video, and IT services has increased since the COVID-19 outbreak, as well as increased expenses in general.
“Most SMBs spend less than 20% of their overall budget on IT products and services, and one-third of SMBs do not appear to have a planned budget for IT products and services in 2020,” Kent said. “At the outset of the COVID-19 pandemic, many SMBs scrambled to get the equipment to allow their employees to work at home. Nearly one-fourth of SMBs report their spending on internet and IT services and devices has increased since the outbreak, and the continued uncertainty of the operating environment is making it difficult for SMBs to develop solid budgetary plans for 2021.”
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