In a survey by American Express, 57% of small business owners say their businesses are fully open as shutdowns ease, with reopen rates aided by companies shifting operations online.
One-third of businesses stated they now either exclusively sell online or expanded to a hybrid business, conducting sales both online and in-person.
The shift to online has reset revenue expectations across small businesses.
Prior to the pandemic, respondents said their average monthly online sales represented 37% of total revenue.
As of February 2021, these numbers jumped to 57%, a 54% increase in less than one year.
When asked if they’ll return to previous in-person levels once the pandemic is over:
- 33% of the surveyed U.S. small businesses plan to expand their digital operations to either supplement or altogether replace in-person operations.
- Only 15%said they will scale down their digital operations to previous levels before the crisis.
The mass shift to sell online has changed the mindset of small businesses about adopting new technologies.
Overall, 77% of small businesses agreed they’re more open than ever before to replace old systems and adopt new technologies to run their company more efficiently.
Growth differs by business size
When comparing small businesses’ year-over-year (YOY) growth between February 2020 and February 2021 across headcount, total sales and profit, large and medium-sized small businesses reported significantly more growth than the smallest of small businesses.
The data illustrates that while all small businesses are making adaptations to grow their companies on the heels of 2020, the smallest of them have not yet benefited from the same growth as their larger peers.
When asked to forecast their revenue growth expectations next month versus last, the average response across all respondents was an increase of 21%.
The largest small businesses were most bullish, projecting a 46% growth in revenue, followed by medium-sized small businesses (40%) and then the smallest companies (13%).
“We knew the path to recovery would look different across businesses, but it’s clear there’s a stark difference between the largest and smallest of small businesses—which represent more than 80%of all companies in the U.S.,” said Rob Frohwein, Co-founder of Kabbage, an American Express Company.
“As our economy recovers it’s imperative all small businesses, especially those most marginalized and vulnerable, have equitable access to financial tools, systems and stimulus programs to ensure we all rebound from this crisis together.”