This economy is rebounding from the COVID-19 downturn at a really solid clip now. Consumers are flush with cash and spending it up, and more people are fully vaccinated every day. That’s especially good news for small and medium-sized service and retail businesses that got hammered as the pandemic raged.
Something like 15-20% of small businesses likely didn’t survive the pandemic. A lot of them are surging back, according to new data from Yelp.
The company reports the second quarter had the fastest pace of business reopening since last spring, led by restaurants and retailers, with home improvement and auto repair and a range of professional services also very strong.
“Over 60,000 businesses reopened, which is the highest volume of reopenings in the last year,” said Justin Norman, head of data science at Yelp.
Plus, a record number of new businesses opened.
And Yelp finds something interesting about where the business buzz is strongest: “[There is a] distinct correlation between the vaccination rate and vaccination completion in an area, and the number of reopenings and consumer interest,” Norman said.
So, that means more Yelp searches, pictures posted and reviews of stores and restaurants in places like Maine, Vermont, Connecticut and New York.
Where there are lower vaccination rates, there’s less consumer interest. “So places like Tennessee, Alabama, Mississippi, but also some places in the West such as Arizona, where vaccination rates are unfortunately low,” Norman said.
What’s really strong — all over the country — is new business openings.
“We know that 2020 had a record number of new business starts, period. People who were furloughed from their job took the opportunity to start their own business. You see this in every economic cycle after the recession,” said Kathryn Petralia, co-founder of the small-business finance firm Kabbage, which is now part of American Express.
New firms are cropping up in almost every sector, from restaurants and food carts to landscaping, construction, salons and gyms.
A lot of founders have one thing in common, said Ray Sandza at small-business software firm Homebase: “These owners tend to be younger, a little bit more tech-savvy, so out of the gate the zero-stage build has technology in the DNA.”
Meaning, he said, they’re built lean, with features like mobile ordering, pick-up and delivery. Labor-saving apps can keep their costs — and need for new employees — to a minimum.