New Small Business Report: Severe Economic Impact on Nation’s Small Business Community

From operations to access to capital and balance sheets, small businesses struggle amid coronavirus outbreak

National Association for the Self-Employed

With the novel coronavirus impacting small business community, the National Association for the Self-Employed (NASE) today highlighted the survey results of the State of Small Business Report conducted by the Small Business Roundtable and Facebook, which indicates that small and medium-sized businesses in the United States are being hit hard by the COVID-19 crisis. NASE has also developed a COVID-19 Resource Page for the small business community outlining helpful information.

“It’s no surprise that the small business community has been hit hard by the coronavirus outbreak,” said Keith Hall, president and CEO of NASE. “With a third of businesses indicating they are shutting their doors, it’s devastating in all aspects of small businesses activity throughout the United States who can not only operate but can’t service to their customers and/or clients and support their employees. If there is any good news in our survey, it’s that small businesses are adapting to this new environment and finding ways to conduct some sort of business during these unprecedented times and they are staying optimistic about the future.”

The survey, conducted by Facebook and the Small Business Roundtable, which NASE is a founding member, was 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, provides a better understanding of which businesses are still operational and which are not, where they are located, and what their most pressing needs are.

Click here to read the full report

“While we applaud our leaders for including our self-employed and independent contractors in federal relief, we are hopeful for a recovery plan that continues to protect and safeguard our small business community,” concluded Hall.

Below are some of the highlights from the report:

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.

The National Association for the Self-Employed (NASE) is the nation’s leading advocate and resource for the self-employed and micro-businesses, offering a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy.

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