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How COVID-19 impact small businesses?

Updated: Nov 18, 2021

According to the 2021 Global State of Small Business Report and the 2020 U.S. State of Small Business Report published by Facebook.


Small and medium-sized businesses (SMBs) across the country continue to struggle with maintaining operations in the face of COVID-19, especially women- and minority-led SMBs.


2021 Global State of Small Business Report
Source: Facebook
  • 68% of SMBs in the U.S. were confident they could continue operating for 6 months or longer if current circumstances persist.

  • Entering 2021, SMBs across the country continue to struggle with maintaining operations in the face of COVID-19, especially women- and minority-led SMBs.

    • 25% of women-led SMBs reported they were closed compared to 20% of men-led SMBs.

    • 27% of minority-led SMBs reported being closed compared to 18% of other SMBs.

    • Black-led SMBs were the most likely to report being closed, at 33%. This compared to just 13% for Asian-led SMBs, 23% for Native American-led and 26% for Hispanic-led SMBs.

  • Female business leaders appeared to be impacted more by increased domestic responsibilities like homeschooling and caring for dependents. Also, operational female-led SMBs are less confident about their future.

    • Only 65% were confident they could continue operating for 6 months or longer, compared to 71% for men.

  • Reductions in sales have persisted the most for minority- and women-owned SMBs.

    • 54% of female-led SMBs had a drop in sales compared to just 47% of men-led SMBs.

    • 55% of minority-led SMBs reported a drop in sales compared to the previous year versus 49% of other SMBs — and they were more likely to have sales drop greater than 50%.

  • Minority-owned businesses were also more likely to feel the effects on employment.

    • 32% reported reduced employment, compared to just 25% of other SMBs.

  • Many SMBs have responded to the pandemic by building their digital capabilities, particularly among women-led and minority-led SMBs.

    • 60% of operational SMBs are using digital tools to communicate with customers, 49% to advertise and 42% to sell goods and services.

    • Women-led SMBs were 7 percentage points more likely to change the way they utilize digital tools than men-led.

    • 44% of minority-led SMBs made at least a quarter of their sales digitally in the last 30 days, compared to only 38% of other SMBs.


The full report is available as follows:


 

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