Jun 01, 2020

Highlights from the Facebook State of Small Business Report

A key takeaway from the May 2020 State of Small Business Report is that you are not alone. Like many small businesses, financial challenges likely top your list of business concerns. Understanding the current state of the small business landscape will help you take steps to propel your business forward.

Facebook and Small Business Roundtable teamed up to conduct a series of surveys of American businesses to determine their challenges and outlook. This first survey, planned before the pandemic struck, paints a picture of the coronavirus impact.

The mechanics of the survey:

Current State of Small Businesses

Not surprisingly, many small businesses shut down due to the pandemic.

Due to slowdowns and closures, employment took a hit. 44% of businesses that are still open reduced employee numbers. Fortunately, some closed businesses (19% of owners and managers and 9% of personal businesses) are still paying employee wages. But for those employees of closed businesses that were laid off, they may not get rehired.

Financial Challenges

Finances top the list of challenges that businesses face.

60% of those surveyed have financial concerns. Those include:

 For hotels, restaurants, and cafes, those numbers were higher:

Reopening

Reopening is the first step in reducing financial challenges. The good news is that 2/3 of closed businesses expect to reopen in the future.

What do businesses need to reopen?

If funds for reopening are the next financial challenge, where do business owners plan to get the funds needed to reopen? Many don’t know.

Money is also a factor for the 1/3 of closed businesses for owners and managers who won’t reopen—34% of those businesses expect to remain closed because they can’t pay their bills or rent.

Cash Flow

Cash flow remains a concern now and for the next few months after reopening.

Our takeaway to mitigate financial challenges—join the 28% of respondents who have a line of credit or a loan from a financial institution and proactively secure business funding for reopening or for your next phase of operations.

Other Challenges

While financial concerns may top the list of concerns per survey respondents, businesses are facing other challenges as well.

Lack of Demand

Lack of demand is the next biggest challenge (20%) cited by business leaders. When businesses reopen, they need customers to survive.

Consider taking these steps to retain and attract customers:

Supply Chain Challenges

Getting supplies will be tough. Of those surveyed:

While there is no silver bullet for fixing supply chain issues, have a heart-to-heart conversation with your suppliers, and explore options for redundancy in your supply chain.

Focus on Technology

Don’t underestimate technology as a tool. Digital sales accounted for at least half of all sales for  56% of respondents that use online tools.

Prepare now for the ongoing need for a digital presence by applying for a small business line of credit.

Support Family/Work Balance

Taking care of household members impacts small business owners and employees. One can’t work and take care of domestic tasks simultaneously. Per the survey:

 Solving the family/work balance problem won’t happen overnight but consider:

At first glance, the survey results paint a stark and gloomy picture of the current state of small businesses. But entrepreneurial grit is prevalent—57% of those surveyed reported being “optimistic or extremely optimistic about the future of their businesses.” Fuel your small business dream by taking steps to address your obstacles, including securing the funding your business needs with a small business loan.

About the author

Katherine O'Malley
Katherine O'Malley
Katherine O'Malley is a contributor to the Lendio blog. A technology geek at heart, she splits her time between traveling, freelance writing, database administration work, and implementing SEO on her travel blog. In her free time, she loves to research the challenges small-to-midsize tourist suppliers face and find ways that technology can help them out.

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