It’s not your imagination–life has become more expensive. From gas prices, rent costs to groceries, inflation has risen by 7.9percent. Although most of us have been affected, Meta is saying small business owners are struggling.
According to their new Global State of Small Business Report, one in five small businesses reported being closed, an increase since our last global survey in July 2021.
The report is based on the findings from a wide reaching survey of nearly 24,000 small and medium-sized business leaders across 30 countries and territories. The responses were collected in January, when many businesses were facing closure because of the omicron variant. Meta said a large number of those businesses are still closed to this day, but there’s still a way forward.
“Despite the setbacks, the survey found a number of reasons to be optimistic for the future,” said Sheryl Sandberg, Meta’s Chief Operating Officer said in a statement. “Overall, businesses globally were less concerned about issues with customer demand and cash flow than they were last summer. And despite the increased closure rates, employment remained stable. Approximately 11% of businesses reported that employment had increased since the start of the pandemic, the same percentage as in July 2021, with large gains in East Asia and the Pacific, South Asia and Sub-Saharan Africa. And 8% of businesses are currently expanding into additional space for their stores. Meta is in the business of small business. More than 200 million businesses use our apps every month to create virtual storefronts and reach customers. Millions have used our tools to help them make the transition online since the start of the pandemic. Whatever challenges and opportunities they will face in 2022 and beyond, Meta will continue to do all we can to help them find success online.”
The report pointed out that minority-owned small businesses have been hit the hardest. About 26% of minority-led small and medium-sized businesses in the US reported being currently closed. 54% of minority-owned businesses indicated they were confident in their ability to continue operating for at least the next 12 months if current economic conditions persisted. This was 12 percentage points lower than other SMBs (67%). 34% of minority-led small and medium-sized businesses in the US reported reducing employment due to COVID-19, compared to 17% of other businesses.
Other insights take a closer look at how marginalized groups are affected as well.
25% of women-led small and medium-sized businesses globally reported being currently closed. Black-owned small businesses are facing record levels of lower sales. In the survey, 51% of operational Black-owned SMBs reported that their sales were lower than the same month in 2021, compared to 30% of other small businesses. 20% of small and medium-sized businesses globally reported being currently closed. This percentage has risen by 3% since our last report in July 2021 (18%). 34% of small and medium-sized businesses globally reported that they reduced employment as a result of the pandemic. 25% of SMBs currently operate a digital-only business, whereas only 10% intend to run digital-only business operations once the pandemic ends. 81% of SMBs across the shared they used digital tools in the past 30 days.