State of Small Business Report

State of Small Business Report

Facebook & Small Business Roundtable
May 18, 2020

Small and medium-sized businesses in the United States are being hit hard by the COVID-19 crisis.

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:

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.

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.

To adapt to the ongoing crisis, SMBs are turning to internet tools.

  • 51% of businesses report increasing online interactions with their clients.
  • 36% report that they are now conducting all of their sales online.
  • 35% of businesses that have changed operations have expanded the use of digital payments.

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%).

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.

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.

Read the full report here.