Facebook’s Small Business Report on COVID-19: What Business Owners Need to Know
By: Cori Widen, Product Marketing Lead at Boosted by Lightricks
It’s no secret that the COVID-19 pandemic and the shutdowns to prevent its spread have had wide-reaching, devastating economic effects – with the small businesses community being especially hard-hit.
Facebook recently released a survey that they conducted in partnership with Small Business Roundtable to understand how small businesses in the U.S have been impacted by the crisis. A key conclusion from the survey is that a significant majority of business owners are optimistic and hopeful that their businesses will survive and thrive.
Facebook surveyed 86,000 people who owned, managed, or worked for small and medium-sized businesses, 9,000 of whom operate “personal businesses:” self-employed individuals providing goods or services who didn’t label themselves as owners or managers. By looking at the data and examining how these individuals are coping with the crisis, you can gain some valuable insights that may help you and your business weather the situation better.
The challenges small businesses are facing
Let’s get the tough news out of the way: small businesses, the survey reports, face an uncertain future. 31% of owners and managers reported that their businesses were not operating because of COVID-19. For personal businesses, that number rises to 52%.
In the majority of cases — 62% — these businesses said that they had closed to comply with orders by their local governments or health authorities. Others said that it was due to the financial difficulties (9%) or lack of demand (7%).
The report highlighted several challenges small business owners are facing due to the current conditions. The most significant were cash flow (28%) and lack of demand (20%). To continue operating, business owners must keep paying their fixed costs such as rent and utility bills, but the lack of sales has made it difficult or impossible just to cover those costs. Even business owners who are able to continue operating as normal may be struggling to get paid by their clients — who are, themselves, experiencing financial difficulties.
Disrupted home/work balance
Aside from the financial strain, small business owners are struggling to balance running their businesses with managing their households.
The shelter-in-place orders have forced the majority of business owners to stay at home with their families. Those who are able to continue working from home must balance this with managing household tasks. 62% of small business owners report spending 1-4 hours a day on domestic and household care activities. 10% of owners and managers surveyed were also caring for dependents such as children or elderly family members, and it’s not surprising that 47% of them reported feeling burned out trying to balance it all.
These issues affect women disproportionately. 55% of personal business owners surveyed were women, and as mentioned above, these businesses are shutting down at much higher rates than small or medium-sized businesses. 33% of women owners and managers reported that household responsibilities were making it significantly harder for them to focus on work, as opposed to 25% of men.
How businesses are coping
Now for the good news. The best news is that small business owners are resilient and hopeful. 57% report that they are optimistic or extremely optimistic about the future of their businesses, and only 11% said they were expecting their business to fail within the next 3 months if the situation doesn’t change.
What is making these business owners so optimistic? It could be that they’re hopeful that the crisis will pass quickly, but the survey shows that even while the pandemic has raged, business owners have been thinking outside the box and looking for new ways to serve their customers.
79% of businesses said they’ve changed their operations to accommodate clients and customers. 23% began offering curbside delivery, and 24% began offering home delivery. The internet has played a significant role in these adaptations: 51% of businesses said they have increased online interactions with their clients and 35% expanded the use of digital payments. 36% of the businesses that use online tools said they’ve been conducting sales online.
What’s more, business owners don’t feel helpless. Many have been turning to other sources of finances to help them get through this challenging time. 41% reported that they could draw from their personal savings to make ends meet. 11% said they could get help from family and friends, 7% from community donations, and 4% from gift cards for clients.
What all of this means for you
If your small business is among the many that have been struggling during the pandemic, the first takeaway from the survey is that you are not alone. This is an unprecedented situation that the entire world was unprepared for. So don’t be hard on yourself, and take heart in that we’re all in this together.
Sheryl Sandberg, Chief Operating Officer of Facebook states that despite all the current challenges, “…business owners and managers are optimistic about their future. They’re resilient, finding new ways to reach their customers online, making adjustments to how and when they do business, and working hard to meet their family obligations at the same time.”
Here are some additional, actionable takeaways from the report:
- Think outside the box: Small business owners are often celebrated for their creativity and adaptability. Sit down with a pen and paper and brainstorm: how can your business model change to better accommodate the current conditions and meet the needs of your clients? What services can you add? What ongoing costs can you trim? What are some creative ways to reach your customers?
- Embrace the internet: We are so fortunate that this is happening in the age of high-speed internet, smartphones, Zoom, and easy-to-use digital payment platforms. Take full advantage of all these tools. Provide online classes, seminars, and events. Spruce up your social media accounts and get more active online. (You can find lots of great tips for building your social media platform on our blog.) Set up a Facebook Shop. Find a digital payment platform that works for your business. Read up on what other businesses have been doing and find the tools that work for you.
- Reach out for help: Don’t forget that there are people out there eager to support you and your business. Don’t be too shy or proud to ask them for help. That doesn’t necessarily mean requesting donations: some businesses have been offering gift cards or coupons that customers can purchase now and use in the future. This can help mitigate issues with cash flow. You’ve put so much effort into building your community of clients, providing them with goods and services they value. You may be surprised to learn how happily they’ll rise to the occasion. People can be incredibly generous, and hopefully, you’ll have an opportunity to pay it forward in the future.
This has not been an easy time for anyone, but Facebook’s State of Small Business Report concludes that your fellow small business owners are overwhelmingly optimistic and hopeful about the future — and especially if you learn from them and do what you can to adapt, you have plenty of reason to be, too.
Cori Widen is the Product Marketing Lead at Boosted by Lightricks. She has been leading product marketing campaigns and doing qualitative market research in the tech industry for 10 years.