Some 86,000 people who were self-employed or owned, managed or worked for small businesses I the U.S at the beginning of the coronavirus pandemic were surveyed, including roughly 9,000 operators of personal businesses (people who reported that they were self-employed and providing goods or services, or producing goods sold for personal income, but did not identify as owners or managers.
Facebook said it will continue to conduct the report monthly in order to provide a picture of the economic impact of Covid-19 on small and midsized businesses in the U.S.
Chief operating officer Sheryl Sandberg and Small Business Roundtable co-executive directors Rhett Buttle and John Stanford said in the introduction to the report, “Small businesses are the heartbeat of our communities—and they’re in real trouble. The pandemic isn’t just a public health emergency, it’s also an economic crisis. Since the first shelter-in-place orders, it has been clear that many businesses were going to take a big hit, but now we can hear from the people behind the businesses just how big a hit they are taking.”
Sandberg added in a Facebook post, “Think of your favorite small business. It might be the corner shop where you grab coffee on the way to work, the barbershop where you get your hair cut, or the restaurant you take your kids on special occasions. Now imagine how much you’d miss it if it disappeared … The State of Small Business Report by Facebook and the Small Business Roundtable is a sobering snapshot of the struggle they find themselves in.”
Highlights of the report’s findings follow:
Small businesses are closing their doors to an uncertain future: 31% of owners and managers who responded to the survey said their businesses are not currently operating, while that number rose to 52% for personal businesses. In addition, 55% of those personal businesses were led by women.
SMBs’ biggest challenges are access to capital and customer behavior: 28% of SMBs said their biggest challenge over the next few months will be cash flow, while 20% cited lack of demand for their products or services.
To adapt to the ongoing crisis, SMBs are turning to internet tools: 51% of respondents cited increasing online interactions with their clients, while 36% of SMBs that are still operational said all of their sales are being conducted online and 35% have expanded their use of digital payments.
Small business owners are struggling to balance running a business and caring for their households: 47% of SMB owners and managers said they were burned out from trying to handle business and household responsibilities simultaneously. The survey found that 62% of them spend between one and four hours daily on domestic or household care activities, with more women (33%) than men (25%) saying their ability to focus on work was affected “a great deal” or “a lot.”
Employees are facing dire economic circumstances: 74% of respondents do not have access to paid sick leave, and 70% do not get paid time off, with those numbers shooting up to 93% and 94%, respectively, for hotel, cafe and restaurant employees. And just 45% of SMB owners and managers said they would rehire the same workers when their businesses reopened, with that number dropping to 32% for personal businesses.
Still, SMB owners and managers remain optimistic and resilient: 57% said they were optimistic or extremely optimistic about the future of their businesses, with just 11% saying that they expect to fail in the next three months should current conditions persist.
Sandberg wrote in her post, “This is the first of an ongoing series that was planned before the virus struck. We had anticipated that it would paint a much brighter picture. Instead, it brings home the scale of the crisis businesses are facing and helps point to where help is most needed. Above all, we hope the optimism of small business owners is well-founded and that future reports will tell a story of recovery and better times to come.”