Business Owners’ Optimism Is Improving, But Recovery Is Not Evenly Distributed
Although there remain many significant steps in the business recovery process following the coronavirus pandemic, the accelerated vaccine distribution in the U.S. is buoying the optimism of small- and medium-sized business (SMB) owners. While 37 percent of business owners report that their recovery could be lengthy, extending into 2022 or even 2023, and 31 percent say they’ve already recovered—meaning they are matching or surpassing pre-COVID revenue numbers—most of the 10,400 business owners polled in April by online referral network Alignable noted that the expedited distribution of COVID vaccines has injected more hope into their business prospects.
Alignable found that 48 percent of SMBs still earn less than half of their monthly, pre-COVID revenues. However, while 75 percent continue to report negative COVID effects, the percentage claiming a “significant negative impact” has dropped 20 percent from March to 38 percent in April. This marks the first time in a year this number has dipped below 40 percent. The data also shows that 62 percent of small businesses are now fully open, reversing a five-month decline and showing a 17-percent bump over last month. Hiring for small businesses has been flat for months, but in the April survey owners predict that nearly all (98 percent) of pre-COVID employees will be back on the payroll by August.
Most of those polled agree that the small business economy is not out of the woods yet, with their No. 1 concern being that the government might mandate closures again because of new outbreaks—in March, their top worry was running out of cash. In addition, a growing number of respondents list skyrocketing prices of supplies as a major concern, sounding the alarm about inflation.
Alignable’s study also measured results among more vulnerable demographic groups as well as certain industries. It found that 43 percent of minority-owned businesses say it will take at least until 2022 for them to rebound fully, and 17 percent said recovery wouldn't come until 2023 or later, while four percent believe they'll never fully rebound. The poll also reports that 19 percent of minority small-business owners say they've already reached or exceeded their pre-COVID sales.
Additionally, 38 percent of women business owners also expect it will take longer than the rest of this year to regain their pre-COVID revenues, 14 percent are already looking at 2023 and five percent think a rebound will never happen. However, 29 percent of women-owned businesses have already reached or exceeded their pre-COVID earnings. Among veteran-owned businesses, 38 percent of veteran-owned businesses expect their full recovery to occur in 2022 or later while 31 percent are already earning as much, if not more, than they did prior to COVID.
Breaking down results by industry, Alignable reports that between 62 and 42 percent of small business owners in the hardest-hit industries in its survey—event management, travel/lodging, entertainers, the visual arts, massage therapists, yoga studios, manufacturing, retailers, beauty salons and restaurants and bars—believe that their recovery will take until at least next year.
Among industries that are recovering more quickly, Alignable says that 51 percent of accountants, payroll managers and others in the world of finance say that they’re already making what they made prior to COVID, if not more. Some 40 percent of insurance agents, 35 percent of realtors and 30 percent of lawyers say the same.
PPAI is currently surveying all member companies to determine their Q1 2021 sales compared to Q4 of 2020 and compared to the same period last year, as well as to measure their business confidence this year compared to 2020, along with levels of product sales. The survey was emailed to all PPAI member companies in early April and results will be shared in this newsletter in the coming weeks.