State of Small Businesses: Only 27% Have Fully Recovered (Down 2% From March, 16% From December) & New Cash Crisis Looms Over 39% Of SMBs
Just a week shy of National Small Business Week in the U.S., the state of small business is, sadly, on a decline in many industries, largely because of growing inflation, a still-broken supply chain, an ongoing labor shortage, and rising rents. That’s based on a poll of 2,279 small business owners conducted from 3/31/22 — 4/24/22 by Alignable, combined with historical data from 675,000 SMBs.
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The State Of Small Businesses
Released today, Alignable's April Road To Recovery Report shows only 27% of small businesses have fully recovered at this point. This figure represents a 2% decline from last month and a 16% drop from Dec. 2021.
Even worse, 39% of SMBs report that they only have 1 month or less of cash reserves -- a 10% jump over last month. As you can see, this figure represents a new high for SMBs' cash crisis, over at least the past seven months.
Beyond those troubling statistics, with increasing cases of variant BA.2 spreading across North America, 59% of U.S. small business owners are concerned this latest COVID wave could further stall their recoveries. That number is up to 70% in Canada. States with the highest rates of BA.2 concerns include Massachusetts (79%), New York (76%), and Illinois (70%). For Canada, the most-worried province is Ontario at 74%.
Other report highlights include:
- Inflation Issues Skyrocket: 92% say they're worried escalating prices are hurting their recovery. Inflation also is the No. 1 concern of all SMBs in April.
- Declining Revenues: 44% of small businesses say they're earning 50% or less of the monthly revenues they generated prior to COVID. (2% worse than March).
- Rent Spikes: 46% say they're paying higher rent than 6 months ago & another 7% say their landlord is raising the rent soon. Overall, 28% said they couldn't afford to pay rent.
- Silver Lining: 78% of SMBs report being fully open, up 10% from last month.
- More Good News: Restaurants rallied: now 33% have rebounded. That's the biggest rate of recovery surge among all industries this month, up 16% over March. (Though, as you can see, many other industries reversed their recoveries).
