Small and medium-sized businesses in the United States are being hit hard by the COVID-19 crisis. But hope is the last to die.
As part of our ongoing data collection effort with the World Bank and the OECD on the Future of Business, Facebook conducted a survey, in partnership with Small Business Roundtable, of approximately 86,000 people who owned, managed or worked for a small and medium-sized business (“SMB”), including approximately 9,000 operators of “personal” businesses, i.e. people who reported that they were “self-employed providing goods or services” or that they “produce goods sold for personal income” but did not otherwise self-identify as an “owner” or “manager” of a business.
The results provide a better understanding of which businesses are still operational and which are not, where they are located, and what their most pressing needs are.
Here are the key results:
1- Small businesses are closing their doors and facing an uncertain future.
• 31% of owners and managers reported that their SMB is not currently operating
• Among personal businesses, that number rises to 52%, of which the majority (55%) were led by women.
2- SMBs’ biggest challenges are access to capital and customer behavior.
• 28% of SMBs said the biggest challenge they would face over the next few months was cash flow.
• 20% said their biggest challenge would be lack of demand.
3- To adapt to the ongoing crisis, SMBs are turning to internet tools.
• 51% of businesses report increasing online interactions with their clients.
• 36% of personal businesses that use online tools report that they are conducting all their sales online.
• 35% of businesses that have changed operations have expanded the use of digital payments.
4- Small business owners are struggling to balance running a business and caring for their households.
• Nearly half (47%) of SMB owners and managers report feeling burned out trying to take care of business and household responsibilities at the same time.
• 62% of respondents report spending between one and four hours a day on domestic or household care activities.
• More women owner-managers (33%) reported that household responsibilities were affecting their ability to focus on work “a great deal” or “a lot” than men (25%).
5- Employees are facing dire economic circumstances.
• Large majorities of employees don’t have access to paid sick leave (74%) or paid time off (70%); among hotel, cafe and restaurant employees those numbers rise to 93% and 94%, respectively.
• Only 45% of owners and managers of SMBs reported that they would rehire the same workers when their businesses reopened. The same was true for 32% of personal businesses.
6- Still, SMB owners and managers remain optimistic and resilient.
• 57% of SMBs report that they are optimistic or extremely optimistic about the future of their businesses
• Only 11% of operating businesses expect to fail in the next three months, should current conditions persist.
