In a word, the current state of small business is “sobering,” according to Sheryl Sandberg, chief operating officer at Facebook.
Sandberg’s assessment is based on a survey of 86,000 small to medium-sized business owners and employees, which Facebook conducted along with the Small Business Roundtable in April.
“It brings home the scale of the crisis our economy is facing,” Sandberg writes in a new blog post.
As of April, nearly a third of U.S. SMBs had shut down, Facebook found.
“For the smallest businesses -- those run by the self-employed or for personal income -- the situation is worse,” Sandberg pointed out. “More than half are no longer operating.”
Sandberg added that the situation is particularly stark for women, considering that they operate 55% of the economy’s smallest businesses.
About a month into the crisis, nearly half of small business owners and managers reported feeling burned out trying to take care of their professional and household responsibilities at the same time.
Yet, 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%).
For those businesses that remained open in April, many were suffering from shortages of cash and customers.
Worse yet, many owners and managers said they were skeptical about a return to business as usual. Indeed, less than half of those surveyed said they planned to rehire all of their former employees.
Nevertheless, a clear majority (57%) of SMBs said they remained optimistic or extremely optimistic about the future of their businesses in April.
By contrast, only 11% of operating businesses said they expected to fail in the next three months, should current conditions persist.
Of course, Facebook’s fortunes are closely tied to those of small businesses.
By Sandberg’s estimation, 160 million businesses use the company’s apps every month, while they collectively contribute a significant share of Facebook’s ad revenue.
In response to the pandemic, Facebook found that about half of businesses were increasing online interactions with their clients, while 36% said they were now conducting all of their sales online.
Long term, analysts have said that this trend bodes well for Facebook and Google, which are the primary seller of media for many small businesses.
“The survivors will be more reliant on Facebook and Google than ever,” Brian Wieser, global head of intelligence at GroupM, said last week.