Yahoo Small Business, a division of Verizon Business, today released findings of the Yahoo Small Business 2021 Microbusiness Outlook Report, a survey exploring the state of microbusinesses, those with five or fewer employees, in the U.S., and their outlook as they emerge from the COVID-19 pandemic.
It turns out that 60% of all businesses in the U.S. have five or fewer employees. Half of these microbusiness owners continue to struggle with the economic impacts of COVID. Anecdotally, not all continue to suffer from a lack of government assistance and loans. Some cannot find the employees needed to keep their business open.
Some 38% have received or expect to receive government support, but 61% expect that support to fall short of fully addressing their financial needs. About 85% of the surveyed businesses say community support was crucial to keeping them in business. The survey’s findings underscore the role community support played for microbusinesses during the pandemic.
Among those microbusiness owners still feeling the impact of COVID-19, 66% have considered closing.
This year, 95% of microbusiness owners are optimistic, 52% plan to expand their business, and 73% say technology will be critical to grow their business as they recover.
Technology will remain an important factor in success. Some 37% of microbusiness will make changes to the way they do business online, showing that technology is a key factor in helping owners succeed amid the unprecedented challenges created by the pandemic.
About 36% invested in software platforms to optimize their business during the pandemic, and another 29% plan to do so before the end of the year.
Ecommerce is growing in importance, not just for larger companies, but microbusinesses as well. In fact, 70% of microbusiness owners who surveyed reported having to make changes to their business, and 74% said they plan to prioritize ecommerce tech during the next one to two years.
For microbusiness owners with no employees, such as a daycare, the pandemic has been particularly difficult. Just 1 in 4 received or expects to receive pandemic-related government support, significantly less than the 42% of their peers with employees.
About 63% of the sole proprietors surveyed report that they did not receive any community support to keep their business operating during the pandemic, highlighting the challenges that sole proprietors face in going it alone.
And 66% said they do not plan to expand in the coming year, compared to just 43% of their peers with employees. Some went out of business.
Still, 46% of sole proprietors reported that their business was unaffected by COVID-19, and just 30% say they had considered closing their business as a result of the COVID-19 pandemic.