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. Thus, they can make the most informed decisions for themselves and their businesses.
In the first month of 2021, the economic situation appears to be relatively unchanged from previous month. At least from the national perspective. Employment rose slightly from gains In education. But other industries saw decreases In employment. According to Paychex’s Small Business Jobs Index, January saw a very slight 0.07% decrease In Small Business employment, but It remains 4.25% lower than last year prior to the pandemic. Overall, it appears that the recent increase In COVID-19 cases has stagnated recovery for the time being.
Source: U.S. Bureau of Labor Statistics Data
The beginning of 2021 offers promising news after a difficult 2020 for many business owners. According to Census data, retail and food service sales increased by 5.3% in January compared to December 2020 to $568.2 billion. This could reflect growing consumer demand and Is very good news for an industry hit especially hard by the pandemic.
There was also a slight 1.2% increase In wholesale sales from November to December 2020, coupled with a similarly small 1.1% increase in manufactured good orders. Although slight, these increases represent good news for industries that focus on business as opposed to consumer sales.
When Visa Franchise analyzed what businesses would be resilient throughout the pandemic, the factors of efficient budgets, secure payments, and market leverage were found to be the most important in determining businesses’ ability to withstand COVID-19’s economic effects. Be sure to check out the article for industry-specific information and analysis!
As the pandemic continues, a central question is whether franchised or non-franchised businesses will be better equipped to deal with the economic challenges they face. New Vetted Biz analysis of SBA loans from 2010 to 2020 found that franchised businesses have a lower adjusted Charged Off rate of 3.53% compared to 4.15% for non-franchised businesses. However, non-franchised did have a higher adjusted Paid In Full rate of 45.17% compared to 33.27%. For more information and industry specific data, check out Vetted Biz’s article.
As the COVID-19 vaccine continues to be administered across the country, It Is likely we will see an increase in small business sales, continuing the upward trend that was seen to end 2020. However, this assumes the continuation of federal relief to small businesses. BizBuySell notes that the CARES act that was implemented in the first relief bill has been instrumental in enabling buyers to afford down payments.
By analyzing SBA loan data from the last 10 years, Vetted Biz was able to find the 25 best SBA loan lenders. The list was developed using a variety of factors. This includes the interest, length, business, and success rate of loans that each lender has given out. This data can be very useful to use if you are interested In finding the best source of financing for your new business.
The Business Services Industry includes a diverse range of companies that all support other businesses’ operations. In the United States, there are over 400,000 Businesses Service companies with combined yearly sales of $917 billion. The average investment amount for a Business Service franchise is $108,000 with many great options for cheaper. Business-to-business (B2B) companies often have lower start-up costs than businesses that focus on consumers (B2C).
Although the pandemic is a challenge for businesses in every industry. The Business Services Industry’s oftentimes secure payments and efficient budgets make it well suited to survive and even possibly thrive in the new business environment. To learn more about the Business Service industry, check out Vetted Biz’s comprehensive industry guide.
Since peaking in the middle of January, covid cases have been on a steady decline throughout the United States. The mass vaccination of the American population is also ramping up with over 66 million doses administered. Although each person does require two doses. In Congress, a $1.9 Trillion stimulus bill Is working Its way through the House of Representatives and could be passed as early as the beginning of March. Be sure to continue checking Vetted Biz for up-to-date information on the rapidly changing business and regulatory environments in these uncertain times.
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