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Irish SMEs pivot to online with recovery gathering pace as country reopens

The Irish SME sector is showing strong signs of recovery from the challenges caused by the pandemic, according to Facebook’s State of Small Business report

With the latest easing of restrictions and the successful roll out of the vaccination programme, Irish SMEs surveyed in July reported a significant increase in sales and confidence compared to the last report in February 2021.

Facebook’s State of Small Business report found that almost 8 in 10 (78%) Irish SMEs were operational and generating revenue, up from 68% in February. Of these operational SMEs, 36% reported higher sales, showing businesses are getting back on their feet since last surveyed when only 10% reported higher sales. Irish SMEs are also ahead of the global average with only 28% of businesses reporting higher sales.

Covid-19 generated a shift in how SMEs around the world and in Ireland do business. Online sales became a lifeline during the pandemic to help keep many of these businesses afloat. The report shows that those who made the pivot to online are still reaping the benefits even as stores physically reopen.

Half of Irish SMEs (50%) report that at least 25% of their revenue is generated by digital sales, up from 35% of SMEs in February, demonstrating that shoppers can continue to support Irish entrepreneurs even when moving to online retail. In addition, of the 30 countries surveyed, Ireland showed the second biggest gain in terms of the share of SMEs using digital tools to support their growth.

Employment trends are also positive, with just 18% of business owners having to reduce their workforce, compared to 25% in February. The future outlook for employment may also be helped by a surge in hiring for Christmas, with 18% of Irish SMEs saying they plan to increase temporary employment over the next 6 months with seasonal hires.

Irish SMEs also appear more optimistic about their future trading, with 64% saying they are confident in their ability to stay open for the next 12 months. This is up from 53% in February, and well ahead of the global average of just 48%. However, 36% of Irish SMEs still expect to encounter cash flow challenges, an improvement on the 54% of companies with these concerns a year ago.

The research also indicates a divergence in the pace of recovery for women-led SMEs versus male-led businesses, with 32% of women reporting higher sales compared to 43% for men. A lower percentage of female-led SMEs (72% versus 83% for male-led) were operational in July.

Commenting on the State of Small Business Survey, Oliver Sewell, Director of Business, Ireland and UK at Facebook, said:

“It’s fantastic to see the significant increase in sales and confidence among Irish SMEs in our latest report. It’s clear that the easing of restrictions have contributed to a crucial boost in economic activity, and in turn have had a positive impact on customer demand and employment outlook for small businesses. Online sales were a critical lifeline for many SMEs through the pandemic, and the shift online is set to endure. Half of Irish SMEs are now making at least 25% of their sales online, even as physical stores have reopened.
This is an opportunity to remind people that shopping online doesn’t mean they have to turn their back on small Irish businesses. They have worked incredibly hard to keep afloat and establish digital storefronts over the past year. These businesses deserve to be found, and they can be found online in a matter of seconds through our platforms no matter where they’re located.”

Earlier this year, Facebook Ireland launched an initiative to train over 10,000 small Irish businesses to support their recovery. The Boost with Facebook programme provides digital skills training to help businesses grow their online footprint, establish online shop fronts, and connect with new customers. In 2020, Facebook Ireland also launched a €4.7 million grant programme to over 1,000 small businesses in Ireland to help them respond to the effects of the Covid-19 pandemic.

Ireland Data

First number is July 2021 data for SMEs surveyed; February 2021 equivalent is in brackets

  • 78%  (68%) are operational or engaging in revenue-generating activities

 - 72% for female led versus 83% for male-led

  • 50% (35%) made at least 25% of their sales online

 - 36% (10%) are reporting higher sales

  • 32% for female-led versus 43% for male-led

 - 35% (62%) are reporting lower sales

  • 38% for female-led versus 29% for male-led

 - 18% (25%) reduced employment due to Covid-19

Global Data

  • 82%  (76%) are operational or engaging in revenue-generating activities

 - 80% for female-led versus 84% for male-led

  • 46% (37%) made at least 25% of their sales online
  • 28% (21%) are reporting higher sales

 - 28% for female-led versus 30% for male-led

  • 52% (55%) are reporting lower sales

 - 53% for female-led versus 51% for male-led

  • 36% (30%) reduced employment due to Covid-19

About the report

The Global State of Small Business Report series is a data collection effort to monitor and share information about the performance of SMEs globally. The results of this report are based upon a survey conducted between July and August 2021, capturing the responses of SMB owners and managers, conducted on the Facebook platform, including over 305 respondents in Ireland. The survey sample was drawn from the population of Facebook platform users. Statistics are reported for people who owned or managed an SME and are weighted to adjust for nonresponse, among other factors. Respondents were invited to the survey and took it within the Facebook app, with participation optional and uncompensated.