Small Business Are In Trouble. But They Are Not Giving Up – Says Facebook
Small Business: The smallest companies are the backbone of the global economy. Before the pandemic, they employed 60-70% of people nationwide – like restaurants, hair salons and shops. It was these points that were essential to the functioning of the economy.
Unfortunately, Covid-19 has been the biggest challenge in years. Not only the health service but also the smallest players on the market fell into financial trouble. To investigate their condition, Facebook and the World Bank and the Organization for Economic Co-operation and Development (OECD) issued the Global State of Small Business Report. The document was based on a survey of 30,000 entrepreneurs from over 50 countries. What is the result of it?
A handful of statistics
The same problems affect both large corporations and small companies. Although the advantage of the latter is greater flexibility and faster adaptation to the new reality, the smallest players simply do not have resources such as corporations. They often depend entirely on current income and previously saved income and cannot cope when difficulties arise.
And these difficulties currently do not offer much room for maneuver: consumption is falling, loans are becoming more expensive, and finding suppliers is more difficult than usual. And that’s just the tip of the iceberg. We already know that to protect themselves from bankruptcy, entrepreneurs will have to resort to wage cuts, deferred tax payments, and take out many loans.
As the report shows, around 26% of global companies had to suspend their operations due to government decisions between January and May. One-third of them were forced to cut jobs. It was even worse with sole proprietorships – these were closed by 30%. The tourism, education and healthcare sectors are doing the worst.
What is the conclusion?
Perhaps most surprisingly, as many as two-thirds of US entrepreneurs surveyed were deeply optimistic. Most of the companies that had to close their doors said they would be able to survive in the long run.
Many owners see the current situation as being able to adapt before reopening. They indicate that they want to focus on appearing on the Internet, as currently, most of the shopping and sale of services is made online. For half of the small enterprises, min. 25% of revenues come from online channels. It follows that online marketing can play a significant role in the pandemic reality.
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