BOSTON–Fifty percent of small business owners surveyed during August reported they're only earning half or less of what they generated monthly prior to the pandemic, breaking a 2023 record.
“This also reflects the largest monthly surge in the number of pre-COVID small businesses affected by significant revenue declines this year -- up 10 percentage points from 40% in July,” said Alignable, which conducted the survey.
Meanwhile, newer businesses -- founded between April 2020 and July 2022 -- are reporting they are in even tougher shape this month, as 53% of them are only earning half or less of what they generated this time last year.
“Given the ongoing struggles small businesses are having in generating more revenues this summer, it's also not a surprise that 39% couldn't afford to pay their rent in full and on time in August, tying April and June for 2023's U.S. small business rent delinquency record,” Alignable said. “This marks an increase of two percentage points over July, and the sixth month in a row that nearly 40% of SMB owners couldn't afford their rent.”
Elevating The Problems
These findings are part of Alignable's August Revenue & Rent Report, which is based on a poll of 4,898 randomly selected small business owners conducted during August, along with over 35,000 responses from past studies this year.
The Findings
Among the findings, according to Alignable:
- Throughout the past 18 months, small business owners have cited inflation as their No. 1 concern and impediment to recovery and growth. While it remains the top concern for 26% polled this month, ramping up revenue is the leading worry for 24%.
- Small business owners in many industries reported challenging revenue figures, led by gym owners, while 58% of beauty salon and barber shop owners said they're making 50% or less in August, compared to their monthly earnings prior to COVID.
- 57% of those in education say August was a rough month, including tutors.
- Real estate (55%) and construction firms (53%) reported their August revenue numbers took a real hit, too.
- Half of all retailers said they're only earning 50% or less than they did on a monthly basis prior to COVID, jumping eight percentage points from July.
- 49% of all restaurant owners reported the same problem, but their surge was much smaller and their August numbers are a little bit better than June's, Alignable said.
The Art & The Science
“SMB owners in other industries (automotive, manufacturing, travel, the arts, and the sciences) also reported some surges and that at least one-third of them have yet to reach their pre-COVID financial health,” the company reported. “But those in the arts and sciences actually fared better than most in terms of their August numbers.”
Alignable said the states where SMBs reported the biggest problems included Illinois, Massachusetts, Minnesota, Maryland, and Virginia.
Rent Delinquency
Alignable further noted that “while we have another record-breaking month for national rent delinquency among small business owners (similar to April and June), some industries broke or nearly matched their own highs, as well, including:
- Independent retailers saw a jump of eight percentage points in terms of their rent delinquency rates, landing at 39% from just 31% in July.
- 41% of car dealers and repair shop owners topped the chart, with those in construction just under them with a rent delinquency rate of 40%.
- 38% of gym owners couldn't cover rent this month, ranking in the top four industries, the same percentage of fitness enthusiasts/experts had trouble in July, too.
- 37% of restaurant owners couldn't cover rent, up one percentage point from July.
- 35% of those in real estate were right behind them, but their rent delinquency rate surged eight percentage points from just 27% in July.
Additional details can be found in Alignable's August Revenue & Rent Report.
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