Report: Small Businesses Face An Uncertain Future Due to Coronavirus
COVID-19 Entrepreneurship News

Report: Small Businesses Are Closing Their Doors and Facing An Uncertain Future

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A report conducted by the Small Business Roundtable and Facebook shows small and medium-sized business owners are suffering during the coronavirus pandemic.

The report, released this month, surveyed approximately 86,000 people who owned, managed, or worked for a small and medium-sized business. The survey also included approximately 9,000 people who reported that they were “self-employed providing goods or services” or that they “produce goods sold for personal income.”

The biggest takeaway from the survey was 31% of respondents reported their business is not currently operating. Among personal businesses, that number increases to 52%, of which the majority (55%) were led by women.

When asked what are the biggest challenges for the next few months, 28% of respondents said cash flow. Twenty percent said their biggest challenge would be a lack of demand due to customers spending less during the pandemic.

Keith Hall, president and CEO of the National Association for the Self-Employed, said the coronavirus is a death sentence for many smaller companies across the country.

“It’s no surprise that the small business community has been hit hard by the coronavirus outbreak,” Hall said. “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 also found some entrepreneurs are still surviving. According to the survey, 51% of respondents reported increasing online interactions with their clients and 36% of personal businesses that use online tools to report that they are conducting all their sales online. Additionally, 35% of respondents said they have changed operations and have expanded the use of digital payment systems.

Despite financial hardships the coronavirus has brought on, many respondents remain confident they can survive and thrive. According to the survey, 57% of respondents report they are optimistic or extremely optimistic about the future of their businesses.

Just 11% of respondents expect to fail in the next three months, should current conditions persist.

Many African American celebrities have made an effort to help small and African American-owned businesses including Magic Johnson and Sean ‘Diddy’ Combs.