COVID-19 Business Closings (and Openings)
Not to engage in piling-on, there is no shortage of news about the effects of COVID-19 related shutdowns, closings, and health-related rules. Your business may be lucky, weathering the storm without skirting forever closure due to loss of business. Or, your business could be limping along, waiting for relief in the form of an open economy.
Perhaps your business received government relief in the form of emergency funding in the series of Covid relief economic aid measures. You may be subject to forgiveness of some loans or you may have an obligation of repayment of some or all the aid money you received.
According to Yelp data reportingi: “Yelp on Wednesday released its latest Economic Impact Report, revealing business closures across the U.S. are increasing as a result of the coronavirus. As of Aug. 31, some 163,735 businesses have indicated on Yelp that they have closed, a 23% increase since mid-July. According to Yelp data, permanent closures have reached 97,966, representing 60% of closed businesses that won’t be reopening.”
The Other Side of the Coin
Again, from Yelp business dataii: “Between March 11, 2020 and March 1, 2021, Yelp has seen more than 487,500 new businesses listing on its platform in the United States. That is down just 14% compared with the year-ago period. More than 15% of the new entities were restaurant and food businesses. Yelp data scientist Justin Norman told CNBC he also sees a comeback “through the 260,000 businesses that have been able to reopen after temporarily closing.”
Of that almost half-million new business openings, 59% were in the professional, local, home, and auto categories. Those categories are showing great promise in the post-COVID economy. Once forced to stay at home in pandemic lockdowns, a trend toward home improvement has emerged and is expected to grow. Yelp’s data shows that the average review mentions for home office improvement increased by 75% year over year. Bathroom renovations grew by 80%.
With all size businesses moving employees home to work and finding it to be viable in the long term, home office renovations are expected to dominate the home improvement segment in the near future. As employees attrition out, businesses also see cost savings in outsourcing to independent contractor freelancers who mostly work from home.
Other data points include:
- Of new business openings, food delivery businesses were up by 128% and the number of food trucks grew by 12%. Though food delivery increases could have been predicted due to COVID lockdowns, the fact that they are still around a year later was not.
- Technology implementation during the pandemic has been dramatic. With online conferencing and business intranets, the work-from-home trend has been quite efficient.
- Yelp updates increased:
- 1.5 million businesses updated their business hours.
- A half million indicated they were offering virtual services.
- More than 450,000 crafted a custom message on their page for customers.
- Remote notarization contributed to a 50% increase in notary services.
There was a lot of economic damage from the pandemic, but the energy and enthusiasm of entrepreneurship has responded with some great statistics.