Over the past year MinistryCPA has taken part in a small business survey from the United States Census Bureau. The survey compiled information from millions of small business owners to analyze how Covid impacted small businesses in different states. If you would like to look at the data for yourself, you can follow the link to the United States Census Bureau Website.
Change in Revenues
Many small businesses experienced a change in revenue over the past year. In June of 2020, 19.7% of small businesses said that they saw growth in their revenues during the previous month. However, at the same time 42.6% said that they had a decrease in revenue. Certain states struggled more than others. A higher percentage of businesses in California, Nevada, and Wyoming were experiencing less revenue. In those states approximately 47% of small businesses had seen a decrease in revenue.
The results of June 2021 tell a significantly different story. 11.2% of businesses said that they had an increase in revenue during the previous month. In the same period, only 20.3% of businesses said that they had a decrease in revenue. Similar to June of 2020 there were a few states struggling more than others. In Louisiana, Georgia, and West Virginia 23%-25% of small businesses saw a decrease in revenue.
Change in Employees
The US Census Bureau also sought to determine how many small businesses experienced a change in their number of employees. The national averages comparing June 2020 and June 2021 were similar (8.9% and 9.7% respectively, increased employment in the prior month, and 11.7% and 8.2% respectively, reported a decrease). In California, Nevada, New Jersey, Kentucky, and Michigan, approximately twice as many small businesses reduced their number of employees leading up to June 2020 and 2021 (25% and 29% respectively). Covid had a large impact on businesses, and states with stricter regulations experienced a larger decrease in small business employment.
The last category of interest is small business leaders' perceptions of Covid and its effect. During June of 2020, 37.7% of business respondents believed Covid was having a large negative effect on their business. That number significantly dropped to 25.5% of small business respondents by June 2021. However, 52% of small businesses in California, Nevada, New York, Michigan, Illinois, Georgia, and Texas believed in June 2021 that they continued to be negatively impacted by Covid.
Small business leaders who are in Idaho, Montana, Wyoming, Oregon, North Dakota, South Dakota, Nebraska, Kansas, and Arkansas reported very different perceptions of Covid in June 2021. There, 55%-65% of small business respondents believe that Covid no longer had an impact on their business.
Overall, this survey has provided intriguing information that can help us to understand how Covid has impacted states and small businesses. There is no denying that Covid has changed how many businesses operate. It will be interesting to see what additional changes come as time goes on.