Small Business Road to Financial Recovery from the Impacts of COVID-19

Carrie KahnOtherLeave a Comment

Now that the vaccine is available to everyone and restrictions are being lifted around the country, we are able to slowly get back to business. Intuit recently released a report, Intuit QuickBooks Small Business Recovery, that shows U.S. Small businesses are on the road to financial recovery from the impact of COVID-19. The report looks at how small businesses fared financially across various industries and geographies over the last year since the beginning of the pandemic. They analyzed data of roughly one million QuickBooks Online customers.

Here a few of the key findings of the Report:

Despite challenges, 61% of industries saw increased revenues during the pandemic

In fact, a diverse group of businesses performed well during the pandemic based on annual revenue data:

  • Mortgage bankers had a 30% increase in annual revenue ($148,000 per business) compared to their pre-pandemic performance.
  • Retail nurseries were up by 17% ($75,000 per business) while hardware stores were up by 14% ($94,000 per business) — likely driven by a surge in home improvement projects.
  • Specialist retailers also saw strong growth during the pandemic, with motorcycle dealers and RV dealers up by 17% and 15% respectively, and meat and fish markets up by 23%.

Even some of the worst-hit businesses are back to pre-pandemic levels

For instance, personal care businesses (barber shops, beauty salons) had a 52% drop in monthly revenue when the pandemic first started. Of these, barbershops were the worst hit, down by 82% (equivalent to $12,000 per business) that month. But in nine out of the last ten months, they have been down less than 20%. In March 2021, they were 16% above their pre-pandemic revenue.

Clothes shops also saw their monthly revenues decrease greatly – dropping by 50% in April 2020. Of these, women’s clothes shops saw the biggest decrease — down by 56% (equivalent to almost $10,000 per business). In nine out of the last ten months, however, women’s clothes shops have been down by less than 10%. In March 2021, they were 14% above their pre-pandemic performance.

By the end of March 2021, all 10 U.S. sectors were back above the monthly revenue benchmarks they set before the pandemic

Monthly revenue for the construction industry in March 2021 was up by 30%; retail was up 22% and manufacturing was up 20%.

For the top 7 performing industries (finance/insurance, agriculture, fishing/hunting, building/gardening materials, utilities, forestry, and crop production) monthly revenues were only down for April and May of 2020; by June, six of these industries were back to pre-pandemic monthly revenues and by September all seven of these industries were ahead of pre-pandemic levels.

Businesses in high-density, urban areas — especially on the East and West Coasts — experienced a greater negative financial impact than those in rural areas.

SMBs in New York, NY saw annual revenue decline $58,000 per business compared to pre-pandemic levels. The other hardest-hit cities were San Francisco (with a decline of $36,000 per business) as well as Brooklyn, Honolulu and Santa Monica, all of which saw a decline of $26,000 per business compared to pre-pandemic levels

Businesses in Gilbert, AZ saw annual revenue increase by $15,000 per business. Other cities that saw increases include Boise, ID ($13,000 increase per business) and Colorado Springs, CO ($10,000 increase per business)

The full press release is here for reference. What’s particularly interesting here is to see both increases and decreases based on location and/or industry but also the absolute dollar amount this represented to impacted businesses.

 

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