If there is one thing about American small businesses, it is that they are fearless and resilient. Prior to the CV19 situation, the American economy was blazing along like it had rarely, if ever, seen before. How are things going for everyone now? The small business referral network, Alignable, took a quick pulse of American small business to see how things are going as of the end of July. The following stats and findings come directly from their published research:
- Alignable has collected over 500,000 business owner responses, since mid-March, mapping the weekly spread of the Coronavirus Impact on Small Businesses Owners across the United States and Canada. Unless otherwise noted, polls in this report were conducted during the week of July 27, 2020.
- The Overall Business Impact declined in July to 74% with 1% improvements in both the number of businesses starting to feel the impact and those who believe the impact has started to decline. We also started to collect information from business owners who’ve experienced an increase in their businesses due to the outbreak. Approximately 12% of respondents fell into this bucket. For the first time since April, we saw the number of businesses reporting significant negative effects fall below 50%.
- States with higher levels of restrictions saw slightly higher overall impact: however, the allocation of the impact was more favorable towards recovery. States with the lowest levels of business restrictions saw higher percentages of businesses that are starting to feel negative effects from COVID-19. These owners also report fewer declines in impact. When comparing US and Canadian businesses, across the board Canadian businesses are currently showing better signs of recovery with only 40% in Canada vs. 49% in the US reporting significant financial impact.
- We continued to see further improvement in the number of fully reopened businesses in July. The percentage of businesses fully reopened increased 6% to 56%. The number of permanently closed businesses remained constant, while 92% of closed businesses reported that they plan to reopen. Not surprisingly, less restrictive states saw a higher percentage (59%) of businesses return to fully opened status than states with higher restriction levels (52%). The delta was split roughly in half between reopened businesses operating at reduced levels and those still temporarily closed.
- The outlook for a return to a “new normal” was similar across the board with the vast majority of business owners looking beyond October to fully reopen, hopefully expediting their recovery. At the state level, business owners in the more regulated states were more satisfied with the approach taken by government with a 51% approval rate vs. just 46% in the less restrictive states. Businesses in states with the most restrictive reopening policies saw slightly higher (2%) concern over government re-closures, while less restrictive states were more concerned with financial resources running out.
- For the second month in a row, we’ve seen steady improvement as more customers return to small businesses. However, we still have a long way to go with 36% of reopened businesses operating with 50% or less of their Pre-COVID customer levels, and 15% yet to reopen. But it’s encouraging to see the 8-point increase from 24% to 32% of businesses operating at or above where they were in January 2020.
- Overall, revenue improvements in July were mixed with 26% of businesses reporting a return to pre-COVID levels (a 4% increase), and 47% of the business owners reporting operating revenues at or below 50% of where they were prior to the crisis. Businesses in less restrictive states saw slightly (1 to 2%) higher revenues than businesses in more restrictive states.
-Written by Kevin Sawyer