A number of organizations, ranging from government to academic entities, have issued reports on the financial effects of COVID-19 on small business in America. Today, Intuit released their report on the financial impact of COVID-19 after commissioning economist Susan Woodward to review anonymized revenue data from 800,000 to 1.1 million QuickBooks Online customers using net bank deposits, excluding government grants and loans. For all findings, you can read the full report here.
- As expected, the initial financial impact was negative on many industries. In April 2020, small business as a whole lost $4.6 billion in monthly revenue compared with pre-pandemic revenue, reflecting a drop of 22% nationwide. However, the impact varied by industry.
- Some industries, such as the recreation industry, were harder hit than others throughout the pandemic and have had a sustained negative financial impact. For example, one business type within this industry, bowling alleys, have annual revenues down by 33% - a drop of more than $250,000 per business — compared to before the pandemic.
- Other (and diverse) industries saw revenue increases during the pandemic. Mortgage banking, retail nurseries, hardware stores, motorcycle and RV dealers, and meat and fish industries all showed increased revenues.
- Some of the worst-hit businesses are either well into recovery, are back to pre-pandemic levels or are even now above pre-pandemic revenue levels. Barber shops, beauty salons and clothes shops are all now performing above pre-pandemic levels.
- By the end of March 2021, 10 key U.S. sectors were back to exceeding monthly revenue benchmarks set pre-pandemic.
Small businesses have and are continuing to respond to changing patterns of consumer demand. Over the course of the pandemic, businesses that were able to respond to the fluctuating patterns were able to adapt and evolve their business processes. Other businesses found it much harder to do so. However, as regulations were and continue to be lifted, more businesses have begun to rebound.
The question that remains is where small business goes from here. Consumer demand which shifted dramatically throughout the past year will continue both because of the continuing impacts of COVID and recovery from its impact and because of normal business cycles. How exactly will demand shift over the next three-, six- or twelve-month periods?
And most importantly, how will you, as the champion of your small business clients, continue to support your clients?