Last month, Facebook published its first Global State of Small Business Report, which provided a snapshot of how SMBs around the world are dealing with the COVID-19 pandemic, based on responses from more than 30,000 small business owners across 50 countries.
And the results, as you might expect, were sobering – among the keynotes.
- A third of the SMBs surveyed reported a workforce reduction as a result of the pandemic
- 26% of businesses around the world had to entirely shut down their operations from January to May
- In some countries, up to 50% of businesses were forced to close
So how have things changed in the last month?
Today, Facebook published its second report in the new series, which provides a comparison between the initial data and where we’re now placed. And while, again, the data is fairly bleak, there are some positive notes.
As explained by Facebook:
“SMB closure rates fell by eight percentage points compared to our May findings, from 26% to 18%. And while the proportion of operational SMBs that reported a year-on-year decline in sales remains distressing at 57%, it has decreased by five percentage points from May to June.”
Some of that data is obscured by the last report, but it’s worth noting the evolving situation. Here are some of the highlights from Facebook’s ‘Wave II’ update.
First off, the data shows that closure rates have declined, with several regions re-opening after the initial lockdown period.
Part of that, however, could also be impacted by permanent closures – if some of the businesses shut down completely from the first report, they wouldn’t be reflected in the second stage. But overall, it does appear that more businesses have been able to re-open following the first push.
Facebook also includes a sector-by-sector breakdown of impacted businesses:
There’s also a positive note on the sales front, with the year-on-year sales impacts reducing from the first period:
Declines above 50% are obviously still a concern, but it does show that some things are slowly coming back as more regions work to contain their outbreaks.
Fewer SMBs also reported cutting staff as a result of the lockdowns:
Though, again, that’s likely impacted by the previous report – if they cut staff in the first period, they may not need to cut staff again. It’s still a positive indicator, in that it shows they’re not reducing even further, but it may not be as reflective of the true impact.
Facebook has also included this chart which looks at the key sources of financial aid for SMBs, which underlines the value of ongoing Government assistance measures:
This is also a risk. Some Governments are looking to scale back their support measures in order to avoid allocating too much funding to prop up their respective economies, and it’s impossible to know how long such assistance will be required. Hopefully, based on this chart, we’ll see those initiatives continue on for some time yet.
As noted, there are some positive signs in an overall gloomy picture, but either way, it’s valuable information to note, as the impacts on SMBs will flow through to all sectors in different ways.
If small businesses are not able to run, that will have consequences across the spectrum, so it’s worth noting the current state, and considering how that impacts your plans.
You can read the full ‘Global State of Small Business Report: Wave II Update’ here.