2020 Was a Challenging Year for Small Businesses — Especially Those Run by Women and Minorities
2020 was a challenging year for small businesses. Many closed their doors either temporarily or permanently, and many that stayed open struggled financially. Throughout the year, Facebook has listened to small businesses in the United States and around the world to find out how they are coping and what they need.
Today, in partnership with the Small Business Roundtable, Facebook is publishing our latest U.S. State of Small Business report, which gives us a more comprehensive picture of the impact COVID-19 had in 2020. For this latest report, we surveyed more than 11,000 business leaders, 8,000 employees and 6,000 consumers between late November and late December.
Last April, when we first surveyed small businesses, it was clear that restrictions on business that were essential for public health were also creating major challenges for many businesses. By the end of the year, more than half of SMBs were still reporting lower sales compared to 2019, and though closure rates improved slightly compared to the early days of the pandemic, they are still high. And while government restrictions remain the main reason cited for these closures, a greater proportion of businesses now report closing due to financial challenges and lack of demand.
It’s also increasingly clear that the economic impact of the pandemic hasn’t been felt evenly. The report shows that female-owned small businesses are closing at a higher rate than those run by men – and this gap has increased since the start of the pandemic. Businesses in minority communities are also closing at a higher rate than others and have seen a steeper drop in sales too.
More optimistically, the survey also paints a picture of resilience and creativity among American businesses. Many that closed earlier in the pandemic have been able to adapt and reopen, helping to reduce the number of employees out of work. And many have relied on the internet to do this, with more than a third of small businesses saying they have increased their use of digital tools during the pandemic.
Facebook is in the business of small business. More than 200 million businesses use our apps every month to create virtual storefronts and reach customers – with millions using our tools to help them make the transition online since the start of the pandemic. Whatever challenges they face in 2021 and beyond, Facebook will continue to do all we can to help them survive and, hopefully, thrive online.
You can read the full U.S. State of Small Business 2020 report here.