More than half of U.S. small businesses are fully reopened as local or federal pandemic shutdowns ease, according to a report from Kabbage, an American Express Company-owned (NYSE:AXP) fintech providing business cash flow solutions.
What Happened: As part of an effort to track U.S. small business growth through 2022, Kabbage polled more than 550 small business leaders.
The survey tracked key performance metrics including headcount, revenue, profit, online strategies, as well as future outlooks, to provide insight into how American small businesses are recovering and adapting amid the pandemic.
The results show that 57% of surveyed businesses are fully open as local or federal pandemic shutdowns ease. Reopening rates, according to Kabbage, were aided also by a shift in operations online that helped boost average monthly online sales revenue by 54%.
When asked whether pre-pandemic occupancy rates would return, 33% of surveyed businesses said they would expand digital operations to supplement or replace in-person operations, while 15% would scale down digital operations to pre-pandemic levels.
Why It Matters: Kabbage data illustrates that the smallest of businesses have not benefited from the same growth as larger peers.
Graphic courtesy of Kabbage.
In fact, when asked about revenue growth expectations for next month versus last, respondents forecasted a 21% increase.
Larger businesses were most bullish, projecting 46% growth in revenue, followed by medium-sized small businesses at 40% and the smallest businesses at 13%.
“We knew the path to recovery would look different across businesses, but it’s clear there’s a stark difference between the largest and smallest of small businesses — which represent more than 80 percent of all companies in the U.S.,” Kabbage co-founder Rob Frohwein said in a statement.
“As our economy recovers it’s imperative all small businesses, especially those most marginalized and vulnerable, have equitable access to financial tools, systems, and stimulus programs to ensure we all rebound from this crisis together.”
What To Look Out For: One of the best signs of business activity is employment.
Half of the Kabbage respondents suggested employee pay without concern would be the best indication of pandemic recovery.
On the other hand, 47% of respondents indicated business leaders paying themselves pre-pandemic salaries would suggest recovery. Forty-seven percent said reaching pre-pandemic gross revenues and total daily transactions would point to full recovery. Thirty-nine percent said higher levels of customer demand and inbound business would suffice.
To learn more about banking products provided by Kabbage, click here.
Photo by Kaique Rocha from Pexels.