Small businesses are turning to social networks to reach customers and embracing digital to evolve, drive online sales and thrive in a post-COVID world, according to two new Facebook research reports.
The State of Small Business report, launched by Facebook in partnership with the World Bank and the Organisation for Economic Co-operation and Development (OECD), is a month on month analysis of the issues affecting SMBs — and how they are addressing them.
Report findings show small businesses on the road to recovery, with less than half (48%) of participating SMBs reporting their sales in the past month as lower than the same month last year. That’s down from 66% reporting lower sales in May of this year.
“What has really stood out to me is the resilience of small businesses and their ability to adapt to the changing circumstances,” Melinda Petrunoff, Director of Small and Medium Business ANZ, Facebook tells SmartCompany.
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It’s no surprise that cash flow is on every business owner’s mind right now — but it’s a concern that’s thankfully lessening as the year draws to an end.
In August, 41% of participating SMBs expected cash flow to be a challenge in the next few months, which is trending downwards from 56% in May, and 46% in July.
“This is a trend we’re seeing month on month. Businesses are slowly starting to get a better idea of where their cash is coming from. And they’re beginning to have a more positive outlook about access to that cash,” Petrunoff says.
She credits this change to businesses embracing digital as a new way to connect with customers.
“We’re seeing that businesses are finding a way to tap into digital tools to be able to drive their revenue.”
Embracing online commerce
Across Australia, businesses are embracing digital platforms. Some are using video software to deliver consults, services and facilitate workplace interactions. Other savvy SMBs are creating seamless shopping experiences on Facebook and Instagram Live, with real time advice and services.
In the past month, 50% of operational SMBs in Australia reported 25% or more of their sales were made digitally. That’s encouraging data, and a sign that small businesses are finding ways to adjust to the new COVID normal.
Practically overnight, businesses were forced to temporarily close their brick-and-mortar operations and embrace digital — and they’re realising it can work.
“Consistently every time I speak to a small business, they’re not looking to go back. They’re looking to understand how they continue to evolve and move forward, given what they’ve learned, and the growth that they’ve had during such a difficult year,” Petrunoff says.
The future is digital
For SMBs that haven’t made the move to embrace digital, time is of the essence.
Small businesses need to broaden their online presence to take advantage of the digital shopping experience, says Petrunoff.
Drawing on insights from Facebook’s recent Future Now research, Petrunoff says the online realm presents a whole new world of opportunity to reach new customers and drive sales.
“Our research showed nearly half of Australians have tried buying online for the first time this year. And we’re seeing demographics like baby boomers and silver spenders increasingly show up online.”
The report found that not only have these demographics bought online for the first time this year, but that they intend to continue buying online post-COVID.
With the holiday season just around the corner, businesses that can tap into this broad audience and perfect their delivery of online offerings will be the ones that succeed.
“Businesses need to experiment with online shopping tools to make sure that they can engage in ways that will help them connect and grow their business,” she says.
“Consider video live streaming, using messenger services to speak to customers or prospective customers and even think about things like stories on Facebook and Instagram.
It’s a great format to be able to capture people’s attention, which leads to sales.”
Founded in 2004, Facebook's mission is to give people the power to build community and bring the world closer together. People use Facebook's apps and technologies to connect with friends and family, find communities and grow businesses.