A new Facebook report shows 15% of small companies with a profile on the sprawling social media platform were forced out of business by the COVID-19 pandemic.
The social media giant reviewed data from more than 150,000 small and medium firms around the globe over a six-month period to measure the virus’s economic effects.
Working in collaboration with the Organisation for Economic Co-operation and Development (OECD) and the World Bank on The Future of Business Survey, Facebook recorded and measured closures, revenue, employment and finances.
The Global State of Small Business Report was conducted on a monthly basis, measuring regional closure rates in more than 50 countries over six waves from May 28 through Oct. 31.
Companies were predictably hardest hit during the first wave, while the second wave saw a “partial return to business.”
Women-owned businesses were disproportionately hurt, closing at higher rates throughout the world.
In a summary of the 59-page report, Facebook notes that the pandemic forced the introduction of new business models and ways of working, including the adoption of e-commerce and other digital tools.
Gradual improvements made as lockdown orders eased or were lifted have slowed or proved unsustainable, however, and cases continue to surge.
For example, 55% of businesses surveyed in the fourth wave reported lower sales compared with the same month a year ago and an improvement of only 7% since the first wave.
Some 34% of those included in the Wave IV survey said they had reduced employment to cut costs.
Over half of small business leaders also confirm they are “struggling” to provide basic necessities — especially as financial support from governments has petered out.
While business operators anticipate challenging economic conditions continuing through 2021, they are also “optimistic about the future.”
That optimism, Facebook found, “increased across each successive survey wave,” the summary concluded.