One in three of the small businesses that have shut down since the coronavirus pandemic hit don’t expect to ever reopen again.
That’s according to a new survey that Facebook /zigman2/quotes/205064656/composite FB +0.20% conducted with the Small Business Roundtable, which questioned about 86,000 people who owned, managed or worked for small or medium-sized businesses with less than 500 employees. That survey pool also included 9,000 “personal” business operators, or those who were self-employed and provided goods or services, but who didn’t otherwise consider themselves an “owner” or a “manager” of an operation.
And as of April 2020, 31% of these small businesses — and 52% of the personal businesses — had stopped operating in the past three months. Some 43% of hotels, cafes and restaurants have also closed in the past few months, as have 41% of wellness, grooming, fitness and other professional services.
Most businesses (62%) in the survey noted that they closed to comply with local government and health department orders to slow the spread of the novel coronavirus that causes COVID-19, which has sickened at least 1.49 million Americans, and killed 89,000 and counting.
But while two-thirds of these businesses were optimistic that they would reopen in the future once these social distancing guidelines are lifted, one-third said that they would probably remain closed for good. More than a third (34%) said this is because they can’t pay their bills or their rent. Another 27% cited “personal reasons.”
“Small businesses are the heartbeat of our communities — and they’re in real trouble,” Facebook COO Sheryl Sandberg wrote in a post on Monday . “The State of Small Business Report by Facebook and The Small Business Roundtable is a sobering snapshot of the struggle they find themselves in.”
This aligns with the latest Small Business Coronavirus Impact Poll from MetLife /zigman2/quotes/206319319/composite MET -0.94% and the U.S. Chamber of Commerce (which was conducted in April), which also found that almost one in three (29%) of respondents had closed their businesses temporarily over the previous two weeks, and more than one in five (22%) feared they were two months or less away from closing for good. And OpenTable’s CEO recently warned that one in four restaurants won’t reopen after the coronavirus pandemic.
This two-pronged health and financial crisis has hit small-business employees especially hard, as most don’t have the paid leave or the savings set aside to help them ride out the crisis. Three in four (75%) said that they don’t have access to paid sick leave, while 70% don’t have paid time off, period. Those figures are even worse for those working in the food and hospitality industry: 94% reported no paid time off, 93% reported no paid sick leave, and only 18% said they had health insurance. Just 19% of overall employees said they had any personal savings, and a mere one in four said they could fall back on household income from a spouse or partner until they got back on their feet.
That’s if they can go back to their jobs at all: Only 45% of owners and managers of small and medium-sized businesses, and just 32% of personal businesses, said that they would rehire the same workers once they reopened.
Roughly half of business owners and managers also reported suffering from burnout while they try to take care of their businesses and their households at the same time. Some 62% of respondents said they spend between one and four hours a day on domestic chores and child care — although women owner-managers were more likely to state that household responsibilities were affected their ability to focus on work “a great deal” or “a lot” (at 33%) compared to men (25%).
The biggest challenges to reopening and staying open cited by these businesses include cash flow and lack of demand, while many owners and managers also cited access to child care being vital as they currently struggle to balance running their businesses and running their households.
“We need financial support as well as better guidance from public health about what is safe,” one anonymous respondent said. “We need child care and schools to open. We need government testing and tracing capability.”
Another called for access to customers. “Stay at home doesn’t always mean shopping from home. All business cannot be digital,” this person wrote. “I’m not suggesting opening doors to nonessential businesses, but until those doors do open, we need financial support.”
The U.S. Treasury Department has established the $670 billion Paycheck Protection Program to provide small businesses hurt by the pandemic with forgivable emergency loans, although the initiative has been dogged by controversies such as small businesses reporting problems in getting aid, while large, publicly traded companies like Shake Shack /zigman2/quotes/209397077/composite SHAK -0.29% and the Los Angeles Lakers have been approved.