‘All business cannot be digital’: Wide-ranging survey shows harrowing economic impact of COVID-19 By Lydia Dishman, Fastcompany
We knew it was bad (COVID-19, the economy, unemployment, etc.), but a new report from Facebook and the Small Business Roundtable that details survey responses from approximately 86,000 small- to medium-sized business owners, managers, and employees shows just how hard the pandemic hit this vital section of the U.S. business landscape.
The State of Small Business report was the result of a series of questions on topics like whether or not a business shuttered, how many people businesses employed, their access to capital, and their biggest challenges. Respondents also reported on how family obligations may have affected their ability to work, their access to information about available resources, survival strategies, and overall optimism for the future.
Among the more telling results are the number of closures over the last three months.
- 31% of SMBs closed down completely
- 52% of personal business (self-employed service providers)
- 43% of hotels, cafes, and restaurants
- 41% of services such as wellness, grooming, fitness, or other professional services
A related impact was the number of layoffs.
- Of the 96% of SMB employees who report having a job three months before the survey, 29% said they are now not working at all.
- 44% said they had to reduce the number of employees or workers at their business because of the pandemic.
- 22% let go of more than 10 people.
- Less than half (45%) of owners and managers of closed businesses are planning to rehire the same workers when they reopen, and just over a third (32%) of personal businesses are planning to rehire those they had to lay off.
- Most likely to rehire were 63% of hotels, restaurants, and cafes, but only 27% agriculture, forestry, fishing, and mining fields businesses said the same.
Nearly half (41%) of business owners and managers were making ends meet by dipping into personal savings accounts. Over a third (34%) of businesses have had a tough time paying their household’s usual expenses in the last 30 days. The numbers rise when it comes to sole proprietors (40%) and owners and managers of hotels, restaurants, and cafés (59%)
Other challenges include juggling business and family needs.
Sixty-two percent of respondents are spending one to four hours on domestic duties. That’s split between men (21%) and women (29%) who reported that these household responsibilities were significantly impacting their focus on work. The report indicated that 47% of respondents said they were burned out trying to take care of both business and family. And 29% were concerned about bringing COVID-19 home.
SMBs’ three most desired policies to help keep them operational were:
- credit access and guarantees (36%)
- salary subsidies (38%)
- tax deferrals (34%)
But with all the added domestic responsibility, a full 23% of owners and managers said they need help taking care of other members of their household.
The majority (57%) of owners and managers of closed businesses said that the only way for their business to reopen was for the government to allow operation, while another 20% said they needed to secure funding.
One business owner cited in the report summed it up: “Stay at home doesn’t always mean shopping from home. All business cannot be digital. I’m not suggesting opening doors to nonessential businesses, but until those doors do open, we need financial support.”
