Kabbage Survey Shows American SMBs Recovering Post-Pandemic
Kabbage from American Express issued the fifth Small Business Recovery Report, an online survey that tracks recovery trends and potential growth of small businesses in the US. Respondents represented industries across retail, marketing, healthcare, financial services, technology, food and beverage, construction, automotive, manufacturing, media, professional services, education, agriculture and more.
After polling 563 small business leaders that included 255 of the “smallest small businesses,” the latest report showcases how many small businesses are doing well in a changing market, as they look beyond challenges over the past two years while simultaneously overcoming the new problems of inflation and supply chain issues.
“Small businesses are preparing for a new type of market. One that’s not driven by the direct impact of COVID-19 – but rather, one determined by the economic aftermath of the pandemic,” said Kathryn Petralia, co-founder of Kabbage. “Economic indicators like inflation will require adjustments, but the new data illustrates how small businesses are making changes and adapting.”
According to the study, small businesses are becoming less concerned about COVID-19’s impact on their operations. The report’s responses showed over 90% of businesses did not have to “stop, slow, limit or shut down” their companies due to the Omicron outbreaks during the holiday season of 2021, while 70% surveyed said they weren’t affected by the variant in any way.
Along with pandemic-induced wounds beginning to heal for small business, respondents to the survey reported their average monthly revenues increased 77% in the past six months, from $47,900 in July 2021 to $84,935 in February 2022. Along with those increases, merchants reported average monthly profits have increased an average of 39% in the same period as well. The study does hint that these growth percentages are heavily weighted toward larger small businesses.
Kabbage says that the smallest small businesses, those with 20 or less employees, reported a 13% increase in average monthly revenues and a 12% increase in average monthly profits from July 2021 to February of this year.
The report touched on hiring rates for smaller merchants, as an initial void of lost workers has been filled. Despite a widespread notion of the job market being wide open, the study found that three quarters of the smallest small businesses said they are not hiring.
The study also found that inflation is increasing prices by an average of 21% across industries. Largely due to increased costs from their vendors and skyrocketing cost of raw materials, smaller merchants are beginning to push these costs on customers.
65% of businesses in the survey said they plan to keep prices high for the next six months, while almost 20% said they plan to raise prices further. Combating increasing costs of their own is an issue in and of itself, and over half (53%) expect their business to be impacted by supply chain issues for up to a year.Last modified: March 30, 2022
Adam Zaki was a Reporter at deBanked.