As the world still battles the pandemic, Facebook has revealed that a substantial number of small businesses still remain closed worldwide and a majority continue to report reduced sales and employment.
While some small and medium businesses (SMBs) have seen a gradual improvement, the pace of economic recovery has slowed significantly in recent months.
“Recent increases in disease spread in some countries are likely to reinforce an underlying sense of fragility and the importance of ongoing financial support for SMBs,” according to Facebook’s sixth Global State of Small Business Report.
“It shows that business conditions have improved since the first survey, but not everywhere, and not for all small businesses,” said Sheryl Sandberg, Chief Operating Officer.
According to the report, the closure rates for small businesses fell to 15 per cent in October, down 11 percentage points from May (26 per cent).
Nearly 55 per cent of those that remain open reported lower sales in October compared to the same month in 2019.
However, the proportion of businesses reporting a drop of more that 50 per cent in year-on-year sales in increasing.
“Despite a gradual improvement in the sales environment, more than 1 in 4 SMBs continued to report difficulty in paying rent or leases, and moire that a third said they had cut jobs in response to the pandemic,” mentioned the report.
“Still, business owners and managers are resilient. The survey shows that despite everything, more than half remain optimistic about the future of their business,” Sandberg said in a blog post on Monday.
Many have acted creatively to find new ways to reach customers, with more than one in four reporting that they have increased or greatly increased their proportion of sales they have made digitally during the course of the pandemic.
Currently, more than 200 million businesses are using Facebook apps every month to create virtual storefronts and reach customers — with millions using the tools to help them make the transition online since the start of the pandemic.
The Facebook report leveraged data from a series of six monthly surveys via a repeated cross-section of more than 25,000 SMBs per wave.
The Global State of Small Business Reports documented the experiences of more than 150,000 business leaders in total from over 50 countries.