Facebook’s Global State of Small Business Report has revealed some interesting findings in the small and medium sized businesses (SMBs) sector. Specifically, one in two SMBs in SA has yet to see revenues recover to pre-pandemic levels. This research examines the ongoing effects of COVID-19 on SMBs in 27 countries and territories.
The research shows that 50% of local operational SMBs on Facebook reported that their sales in February were lower than the equivalent month last year with more stats showing that:
- 74% reported that they were operational or engaging in any revenue-generating activities.
- 8% of operational SMBs on Facebook expected challenges related to cash flow.
- 20% expected challenges related to demand or a lack of customers in the next few months.
Continuing trends observed throughout the pandemic further reveal that:
- Women-owned South African businesses have been hit especially hard.
- Some 71% of women-led SMBs (vs. 77% of men-led SMBs) on Facebook reported that they were operational.
- Six in 10 operational, women-led SMB reported that sales in the past month were lower than February 2020, prior to the pandemic, compared to four in 10 of operational, men-led SMBs.
“South African small businesses continue to struggle since the start of the pandemic, more than a year ago” says Nunu Ntshingila, Facebook Africa’s Regional Director. “Our latest Global State of Small Business Report is a timely reminder that many are still vulnerable and need support. It’s also a reminder that whenever a crisis hits, it’s always the most vulnerable who are hit the hardest.”
Less than half (45%) of operational South African SMBs on Facebook said they were confident in their ability to continue operating for at least 6 months, if current circumstances persist, while 36% of operational SMBs on Facebook reported they had reduced the number of employees/workers as a result of the pandemic. If anything, all these findings highlight that there is an urgent need for customers, government, and other stakeholders to continue supporting small businesses who continue to navigate the challenges of Covid-19.
Having said all of that, it turns out there is a silver lining – many businesses are finding success online. Globally, 87% of business leaders at operational SMBs indicated they used at least one of the Facebook family of applications such as Facebook, Facebook Messenger, WhatsApp, WhatsApp Business, and Instagram. Advertising and selling goods or services online were other predominant uses of digital tools and integral to connecting SMBs to customers.
Ntshingila says: “Facebook is in the business of small businesses. Whatever challenges and opportunities South African businesses face in 2021 and beyond, we will continue to do all we can to help them with their economic recovery and, hopefully, thrive online.”
As part of its ongoing commitment, Facebook last year launched Facebook Shops to make it easier to sell online for local businesses. In addition, the company also created a Business Resource Hub where SMBs can get training, advice, and information – including from healthcare experts.
