CO Small Businesses Recovering, But Challenges Persist: Facebook

COLORADO — Colorado small businesses are recovering from the pandemic faster than the national average, according to Facebook’s most recent State of Small Business report released Friday.

Last year, Facebook began surveying small business owners around the world to find out how the pandemic is affecting them and what help they need to weather the challenges. For its eighth survey, Facebook in July surveyed more than 35,000 small businesses leaders across 30 countries.

The latest findings show some signs of recovery, but small businesses are still struggling.

In Colorado, the percentage of business closures is lower than the national average. In July 2021, 10 percent of small businesses in Colorado reported being closed, and the national average was 18 percent.

Here’s what else the report found about the state of small businesses in Colorado:

• Around 20 percent of small businesses in our state reported reducing employment, compared to the national average of 24 percent of small businesses who reduced employment.
• 27 percent of small businesses in Colorado reported having lower sales, compared to the national average of 34 percent of small businesses who reported lower sales.
• 68 percent of small businesses in Colorado reported confidence of staying open for the next six months under current conditions, compared to the national average of 64 percent of small businesses with the same confidence.

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Nationwide, just under 1 in 5 small businesses reported they were closed in July 2021, a decrease from 24 percent in February. In this case, a closure was defined as a business that was “non-operational” or not generating any revenue. The report does not distinguish whether the closures were permanent or temporary.

“Our State of Small Business reports have painted a consistent and sobering picture — the pandemic has been devastating for small businesses everywhere,” Sheryl Sandberg, chief operating officer of Facebook, said in a news release. “Many have closed for good, and many of those who remained open have seen sales slump and staff laid off. And it has hit businesses led by women and under-represented communities the hardest.”

Women and minority-led businesses are indeed more likely to be closed than the global average, underscoring findings from earlier this year.

Twenty percent of women-led businesses were closed globally, compared to 16 percent of those led by men. At 24 percent, Hispanic owners in the United States were the most likely to report their businesses as closed, a drop of two percentage points since February.

Minority-led businesses in the United States also reported lower sales compared to the same period in the previous year, with 44 percent doing so compared to 29 percent of other small businesses.

Despite more businesses reopening, owners are still struggling financially, according to the report.

• About 34 percent of small businesses are reporting decreases in sales.
• Three out of 5 owners said they had some difficulty paying business-related expenses.
• Roughly 25 percent reported struggling to pay down loans or debt, bills, rent, and employee wages.
• About 36 percent are reporting staff reductions, up from 30 percent in February.

Despite ongoing challenges, a majority of business owners believe they can weather the storm — about 64 percent said they are confident they can stay open for the next six months under current conditions.

The full Facebook report is available to view online.