Kabbage, an American Express company, issued the third installment of its Small Business Recovery Report, which tracks U.S. small business recovery and growth outlook through 2022. Polling 550 small business leaders, the latest report shows small businesses’ sales and profits are nearing pre-pandemic levels, while hiring and vaccination protocols present unique challenges on the path to recovery.
“It’s clear as COVID restrictions lift across the nation and Americans’ lives largely return to a new normal, the economic effects among the smallest of small businesses linger,” said Kathryn Petralia, co-founder of Kabbage, an American Express company. “Yet as customer demand rebounds and businesses’ doors reopen, all small businesses must navigate new economic and local challenges that affect their path to return to growth.”
The recovery of sales and profits vary
Conducted between May 27 and June 24, 2021, the survey compared small businesses’ revenue and profits from the 30-day period prior to completion of the survey to the same timeframe in 2019 before the pandemic. On average, small businesses reported earning $51,200 in total sales and $37,000 in profits in the past 30 days this year, compared to $63,900 and $48,900 pre-pandemic, respectively. As two core metrics of business success, respondents reported reclaiming an average 80% of total sales and 75% of profits of what they earned before the crisis.
However, that average is primarily carried by medium and large-sized small businesses, both of which reported that their recent total sales represented over 90% of what they earned when it was business-as-usual in 2019. The smallest small businesses reported reaching only 55% and 57% of their pre-pandemic sales and profits, respectively, putting into perspective that the path to recovery for the smallest businesses varies widely from their larger peers.
No vaccinations, no service
Two in three (67%) of the small business respondents reported they were fully vaccinated. For comparison, as of July 2021, the Centers for Disease Control and Prevention (CDC) reported 59% of the U.S. adult population is fully vaccinated, suggesting small business leaders are outpacing the national vaccination rate of U.S. adults. When asked approximately how many of their employees are fully vaccinated, small businesses gave an average response of 40%.
The report further conveys the importance of vaccinations for small business respondents and its impact on their employees and customers. When asked if they would require customers to show proof of vaccination to shop in their store without wearing a mask, 34% said yes.
In addition, nearly one in five of all small businesses (19%) said they were “100% certain” they would require non-remote employees to be vaccinated, while 31% said they would “likely” require it.
Help is still wanted
Respondents from small businesses of all sizes reported difficulties in filling open roles and impacts on their business. Nearly one-third (28%) of all small businesses said it is difficult or very difficult to hire new employees, which increased further among medium-sized businesses (43%) and large-sized businesses (40%).
Over a quarter of respondents (26%) cited candidates not needing the additional income due to stimulus payments or unemployment benefits as the primary reason for hiring challenges. Nearly one in five (19%) said candidates are prevented from accepting job opportunities due to obligations they have at home whether to care for children or family. As a result, one third of small business respondents (30%) said the process to fill a job opening can take five to six weeks, and 15% said it takes longer than eight weeks.
These hiring challenges come at a time when over two in five of all businesses (44%) are receiving more online sales during non-business hours, causing some business owners and their teams to work longer hours. On average, respondents reported they are working between three to six additional hours per day than before the pandemic.