Small businesses worldwide are recovering, if in fits and starts, from the body blow delivered by the global pandemic.
Facebook’s latest Global State of Small Business study offers a snapshot of how SMBs across the globe are faring as the world emerges from the Omicron wave of the global pandemic. The bottom line is that Omicron interrupted but didn’t end the global small business recovery.
Facebook conducted the survey in January this year. The sample was 28,840 small businesses across 30 global markets, with the U.S. sample being 5,324.
Here are some of the global survey’s more significant findings.
Slight Setback on Business Closures
The number of small businesses that were open for business was trending up when Facebook did its last survey in July 2021. While the January 2022 results showed a slight setback in small business closures.
Globally, 20% of SMBs reported being closed in January 2022. That’s a three percentage point rise over July 2021. North America had the largest increase in closures, rising by seven percentage points to 21%.
The highest overall closure rares were in the Middle East/North Africa, South Asia, and Sub-Saharan Africa. But as the report notes, those regions have been consistently higher than the rest of the world.
The study also found a correlation between vaccination rates and the rate of business closure. Not surprisingly, the higher the vaccination rate, the lower the small business closure rate. Facebook was careful to say that it could not establish causation, just correlation.
Women and Minority-led Businesses Hit Hardest
This edition of the survey focused specifically on understanding how the pandemic is impacting women and minority-led businesses around the globe. Overall, it appears that the pandemic has been harder on these segments.
For example, 25% of women-led businesses worldwide were closed. By comparison, only 17% of male-led businesses were closed during the same period.
As the chart below shows, rates of closures varied significantly by market. But one thing that was consistent was that, with few exceptions, women-led businesses ad higher closure rates, regardless of the market.
U.S.-based minority-led businesses faced a similar story. This was a specific focus of the survey.
The latest survey showed much higher closures among U.S. minority-led businesses. The figure was 26% vs. 19% for non-minority businesses. However, Hispanic-led SMBs reported closure rates similar to the overall figure, at 21%. This was a three percentage point improvement over the prior survey.
Business Booming for Those Who Stayed Open
On the positive side, it really paid off to remain open during the last wave.
“More positively, sales performance appears to have improved for SMBs that have continued to operate, and employment has remained stable for operational SMBs despite the increase in closure rates,” the report said. “Approximately 54% of SMBs reported higher sales or steady sales compared to the previous year, 6 percentage points higher than July 2021 levels.”
