Business Health Index January 2021 Report

Written by: Patrick Findaro
Last Updated by María Fernández Amato: August 16, 2022
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This article is based on the video featured above, originally recorded for Vetted Biz Youtube Channel.

This report is a monthly analysis of the economic environment for small businesses. The analysis is made to inform current small business owners and prospective investors about the broader economic forces and trends so that they can make the most informed decisions for themselves and their businesses.


Business Health

Overall Outlook

The story for much of 2020 and early 2021 has been a bleak economic outlook for small businesses across a range of industries based on the economic effects of the COVID-19 pandemic. In late 2020, the U.S. economy appeared to slowly recover from the economic effects of the pandemic, but the recent holiday surge in cases and regulations resulted in a loss of 140,000 jobs in January and decreased labor market improvement. Consequently, the small business health index is at a lower level than a year ago with increased payment delinquency and less credit card use.

business index

 Graph of Total U.S. Employment in 2020 (In Thousands)

Source: U.S. Bureau of Labor Statistics Data

Existing Business Health Trends 

Different industries have seen wildly different performances in the closing months of 2020. On one hand, Food and Beverage businesses have struggled with sales down 21.2% in December relative to 2019. On the contrary, retail sales increased by 6.3% relative to 2019, although much of this increase is from non store retailers whose business increased 19.2%. Hospitality and other industries that rely on travel and physical contact have been most adversely affected during this period due to customer apprehensions and regulations. Vetted Biz’ analysis of Small

 Business Association loans from 2010 to 2019 found that Food and Beverage, Fitness Centers, and the Retail Products and Services businesses had the lowest loan success rate among non-franchised businesses prior to the pandemic.

This could mean these industries are likely going to struggle with further loan payment problems, as they have been among those hit hardest by the pandemic.

Business Health



Franchise Business Trends

Many franchises are in industries that have been negatively impacted by the pandemic, however, it remains to be seen whether franchises will outperform independent businesses. Frandata research on franchises recovering from the pandemic has shown that only  26% were unaffected by the economic.

Business Acquisition & Loan Financing

Although the early months of the pandemic witnessed a sharp decrease in business sales, the third and fourth quarters of 2020 saw a rebound in activity. Data from BizBuySell shows that total business sales reached levels above previous years in October and small business sales came close to the 2019 levels in the third quarter. 

According to their survey data, the sales are being driven by buyer confidence in being able to purchase businesses at a discount relative to previous years, compared to decreased seller confidence in getting a better price than precious years. At the same time, the median price of businesses sold has increased over last year, reflecting a trend in the sale of businesses at a premium that is able to perform well in the pandemic. Fort hose looking for business opportunities, Vetted Biz has useful tools and information on over a thousand businesses for sale.

Business Health


Economic Recovery & COVID-19

The ongoing global pandemic has left current and prospective business owners with more questions and answers. Although it is impossible to perfectly predict the future.

Vetted Biz analysis on recession recovery trends provides insights into the different models of economic recovery the country and small businesses could experience. The additional waves of COVID-19 have prolonged and slowed the recovery process, especially recently as cases reach all-time highs. However, this still fits within the “Nike Swoosh” recovery model of a sharp crash and slower recovery.

Businesses“The Nike Swoosh” COVID-19 Recovery Model

Business Health

The “V-Curve” COVID-19 Recovery Model

A pattern we have not fully seen due to lingering health and economic issues

Moving Forward 

Looking ahead to the future, vaccine administration and the new Biden administration’s policies will have a large effect on business acquisition and administration over the upcoming months. New stimulus packages are possible that could provide consumers with money and loans through the Small Business Administration. Additionally, new or loosened restrictions on businesses could affect their ability to remain profitable. Be sure to check Vetted Biz for up-to-date information on the rapidly changing business and regulatory environments in these uncertain times.

About Us

Vetted Biz is the leading platform for accessible and analytical data on franchises and businesses available in the U.S. Our goal at Vetted Biz is to bring transparency to potential franchisee owners as they navigate the process of buying a franchise as well as franchisors that are vetting potential franchisees. Our research team has reviewed over 2,900 franchises and knows the key facts and data that signal a successful franchise system. Data is collected from sources including but not limited to Franchise Disclosure Documents, industry reports, SBA loan data, and other business research. 

The business owners and business brokers listing businesses for sale must confirm that numeric information matches those in the point of sale software, tax returns, or other credible sources.If you are an aspiring business owner looking for a place to start. Vetted Biz can provide you the analytics and resources to power your search and analysis for your future business. The team behind Vetted Biz has advised hundreds of entrepreneurs in finding and analyzing franchises across the U.S. and now are offering key analysis and data directly on Vetted Biz.

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