Meta’s latest Global State of Small Business Report reveals the current challenges Australian small and medium-sized businesses are facing in a post-pandemic world. Harry Lowes, Director, GBG Mid-Market, Meta ANZ, shares how Aussie small businesses are faring.

The COVID-19 pandemic affected businesses globally for more than two years and small and medium-sized businesses (SMBs) were hit particularly hard due to their vulnerability to economic shocks.

As we move into a post pandemic world, we see a shift in challenges away from those that arose as a result of the COVID-19 pandemic and toward new ones arising from market stabilisation and new norms.

This month, Meta released the Global State of Small Business Report, our tenth report over the last three years. The survey of more than 22,000 small and medium-sized business leaders across 30 countries and territories takes a deeper dive into the economic reality of entrepreneurs around the world.

Digital tools helping mitigate tough economic conditions

The report reveals that as the COVID-19 pandemic wanes, the greatest challenge SMBs are facing now is the current state of the economy, including inflation.

We found that 19 per cent of small businesses remain closed globally, a 1 per cent improvement compared to when we ran this survey in January. Australia’s closure rates were 20 per cent, compared to the last report where 22 per cent of SMBs were closed. As a result of these ongoing economic headwinds, nearly half of SMBs (40 per cent) reported increasing their prices by 20 per cent or more in the past six months.

Amid the challenges, small businesses have continued to innovate and adapt to economic hardship by using digital tools, with 58 per cent of SMBs reporting they’ve used digital tools to communicate directly with customers.

Take Aroma Baby for example; an Aussie small business that started 27 years ago to fill a need in the skincare sector, as one in four babies in their first six months were suffering from skin irritation or eczema, potentially linked to skincare ingredients. This small business leverages Meta platforms to reach customers during key sales periods, and has seen an increase in sales of approximately 15 per cent when using digital tools.

Women in business leading the charge

Digital tools have played an outsized role in generating sales for diverse-owned businesses in particular, which is critical as the report has historically revealed these communities have faced higher closure rates.

For example, small businesses led by women used digital tools at higher rates and generated more online sales revenue than male-led small businesses. Our report also found that 39 per cent of operational, women-led SMBs globally on the Facebook app reported that sales in the past 30 days were higher when compared to the same month last year.

While the economy continues to affect the trajectories of many small businesses, the majority remain cautiously optimistic about the future and their ability to continue running their business. 59 per cent of SMBs globally reported expecting to remain in business over the next six months.

Entrepreneurs around the world are incredibly resilient. I’m optimistic that they can not only survive these headwinds, but thrive in the next chapter of their business.

Read the full Global State of Small Business Report.

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