Facebook survey: 31% of small businesses are closed; only 45% will rehire same workers

RALEIGH – Some 31 percent of small- and medium-sized businesses are closed and only 45 percent of the owners plan to rehire the same workers they had onboard before the COVID-19 pandemic wrecked much of the US economy, according to a new survey from Facebook.

The rehiring finding could be bad news for the growing numer of unemployed in the US – some 36 million with nearly 1 million of those living in North Carolina.

However, more than half those surveyed are still optimistic about their businesses as the US begins to reopen economies. And just 11 percent expect business failure in the next three months should the current economic conditions continue.

Working with the Small Business Roundtable, Facebook surveyed 86,000 people that the social media giant identified as “owned, managed or worked for a small and medium-sized business.” Among those were some 9,000 operators of personal businesses.

The survey adds to the difficult outlook for smaller businesses.

“Nearly one-third of small business owners are dipping into their personal savings to finance their business,” Wilmington-based Live Oak Bank reported last week.

Meanwhile, more than 70 percent of businesses are also reporting negative sales impact – with half of small businesses report supply chain interruptions.

Key findings of the Facebook survey:

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%/
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.

Report: 70% of small businesses hit by falling sales, demand for credit surges

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.

Most 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 online.