- Small Business Recovery Report finds that larger small companies have seen better growth during the COVID-19 pandemic and have a more optimistic outlook about the future
- Fifty-seven percent of businesses have fully reopened
- Companies show a strong shift toward e-commerce, with one-third planning to expand digital operations
Summary by Dirk Langeveld
Larger small businesses have shown more resilience during the COVID-19 pandemic, according to a report by the fintech company Kabbage. Larger companies reported stronger growth during the pandemic and were also more optimistic about potential revenues for the year ahead.
Kabbage, an American Express company, polled 550 small business leaders as part of its Small Business Recovery Report, a research effort set to extend through 2022. Businesses with 101 to 500 employees saw their revenues, workforce, and profits grow by about one-third on average between February 2020 and February 2021. Businesses with 21 to 100 employees saw growth of about 20 percent on average. Businesses with 20 or fewer employees saw an average growth of 3 percent in workforce and 2 percent in revenues, while profits were flat.
Larger small companies said they expect their profits to grow by an average of 46 percent in the year ahead, while the average midsize company anticipates 40 percent revenue growth. The smallest companies expect to see their revenues grow by an average of 13 percent.
The poll reflected a widespread migration to e-commerce, with one-third of respondents saying they had shifted to online-only business or adopted a hybrid model of both in-person and online sales. While the average small business owner in February 2020 got just 37 percent of their total revenues from e-commerce, the share leaped to 57 percent in February 2021.
One-third of the businesses polled plan to expand their digital operations to either complement or replace their in-person offerings. Just 15 percent say they will scale down their digital operations after the pandemic. Seventy-seven percent said they were open to adopting new technology or replacing old systems to improve their efficiency.
Fifty-seven percent said they have fully reopened as COVID-19 vaccines are distributed and business shutdowns and restrictions are lifted.
Asked which milestones they would consider indicators that their business has recovered from the pandemic, half named the ability to pay employees their full wages without concern. Forty-seven percent said they would consider themselves to be past pandemic concerns if they were able to pay themselves their pre-pandemic salary, or achieve pre-pandemic levels of transactions and gross revenues. Thirty-nine percent said higher customer demand and new inbound business would mark the turning point.
Fifty-five percent of the 550 small business owners polled for the report headed a business with 20 or fewer employees, while 27 percent led a company with 21 to 100 employees and 18 percent oversaw a company with 101 to 500 employees.
