Financial Status

How Has The Pandemic Impacted Our Small Business Community?

From operations to access, capital to balance sheets, the severity of a struggle to rebalance and restart

A new study from the National Association for the Self-Employed (NASE) shows how hard a hit COVID-19 delivered to small business. Access the full report here.

WASHINGTON, D.C. – With the novel coronavirus impacting small business community, the National Association for the Self-Employed (NASE) today highlighted the survey results of the State of Small Business Report conducted by the Small Business Roundtable and Facebook, which indicates that small and medium-sized businesses in the United States are being hit hard by the COVID-19 crisis. NASE has also developed a COVID-19 Resource Page for the small business community outlining helpful information.

“It’s no surprise that the small business community has been hit hard by the coronavirus outbreak,” said Keith Hall, president and CEO of NASE. “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 operate, and can’t service their 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.”

Survey Parameters

The survey, conducted by Facebook and the Small Business Roundtable, which NASE is a founding member, was of approximately 86,000 people who owned, managed or worked for a small and medium-sized business (“SMB”), including approximately 9,000 operators of “personal” businesses, i.e. people who reported that they were “self-employed providing goods or services” or that they “produce goods sold for personal income” but did not otherwise self-identify as an “owner” or “manager” of a business, provides a better understanding of which businesses are still operational and which are not, where they are located, and what their most pressing needs are.

“While we applaud our leaders for including our self-employed and independent contractors in federal relief, we are hopeful for a recovery plan that continues to protect and safeguard our small business community,” concluded Hall.

Excerpts From the State Of Small Business Report

A focus on Employees
Many of the respondents to our survey were people who, until recently, worked for an SMB. Their experiences are varied, but their responses share a common theme: they’re under stress, but remain optimistic. Of the 96% of SMB employees who report having a job in 3 months prior to the survey, 74% worked full time and 20% worked part time. And now, 29% of those same respondents report not working at all—44% of whom because the business they worked for has shut down, 22% because they were let go and 10% because of local ordinances to shelter-in-place or quarantine.

Small business employees even when businesses remain open, employees are experiencing financial cuts from lost employment or fewer hours worked. While 3% of businesses reported that their employee headcount actually increased, 44% said they had to reduce the number of employees or workers at their business because of the pandemic. Of businesses that reduced headcounts, 22% let go more than 10 people. Larger layoffs of more than 50 employees hit the Midwest the hardest (13% of businesses cf. 5% overall.)

Any time a business closes or has to lay off workers, it affects entire communities of people who rely on income from jobs to support themselves, and in turn, support other local businesses and organizations. Some 65% of owners and managers who employed more than one person reported that, since their business closed, their workers were unable to get any additional salary or wages, end of service bonuses, unemployment benefits, or any discounted or partial health insurance. In keeping with a trend, for personal businesses that number rose to 77%.

Unemployed Small Business Workers
Job prospects for unemployed SMB workers remains uncertain. According to the survey: only 45% of owners and managers of closed businesses reported that they would rehire the same workers when their businesses reopened, while 32% of personal businesses said they would do the same. When responses were analyzed by industry, 63% of hotels, restaurants, and cafes expressed plans to rehire the same employees, while among firms in the agriculture, forestry, fishing, and mining fields, this number falls to 27%.

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 operate, and can’t service their clients and support their employees...

Also noteworthy: 19% of owners and managers of closed businesses reported they were keeping their workers and still paying part of their wages; for personal businesses, 9%. As might be expected, people are focused on the essentials. Their top concerns were having enough money to sustain their household (51%) and having food and basic supplies (46%). Relatedly, only 11% of employees report having applied to receive any government or NGO assistance in response to the pandemic.

Prospects of Reopening
Owners and managers of SMBs are known to be resilient, but times are tough. While two-thirds of closed businesses expect to re-open in the future, including a slightly higher percentage of women than men (71% to 62%, respectively), among the one-third who did not, 34% said it will be because they can’t pay their bills or their rent (55% in the Midwest).

Only 15% of owners and managers of personal businesses also cited financial pressure— 27% said they did not expect to re-open for “personal reasons.” And even when the time comes to re-open, the path forward is not always clear. While 41% of owners and managers say they plan to use personal savings to reopen their business when the time comes, 39% do not know where they’re going to get the money. Again, personal businesses face a different reality: only 28% plan to use personal savings, while 53% are uncertain where the necessary funds will come from.

Challenges Of Closure And Prospects Of Reopening

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%, of which 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.

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.

Still, 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.

Access the full report here.




The National Association for the Self-Employed (NASE) is the nation’s leading advocate and resource for the self-employed and micro-businesses, offering a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy.
The NASE Next Biz Thing helps identify and connect our nation’s smallest businesses. Need small business help? Check out NASE’s Ask the Experts for advice or the NASE Minute for small business support.
The NASE is a 501(c) (6) nonprofit organization and provides big-business advantages to hundreds of thousands of micro-businesses across the United States. For more information, visit the association’s website at