Data
SMB General
Data
SMB General

4 Insights About Small Business Performance During the Pandemic

Abstract green, purple, and teal image.

Key findings from our sample of 2.7 million U.S. small businesses:

  • More than 50% of the largest businesses in our sample saw revenues grow during the pandemic
  • Very small businesses were 6x more likely to cease operations during the pandemic, compared to larger businesses.
  • 17% of very small businesses ceased operations during the pandemic
  • Less than 1% of the largest businesses in our sample ceased operations during the pandemic

Which small businesses suffered most?

As part of Enigma’s ongoing research into the health of the small business economy, we analyzed how small businesses of different sizes fared the pandemic. What did we discover? The smallest businesses suffered the most.

The very smallest businesses were six times more likely to cease operations during the pandemic, compared to larger businesses. Conversely, more than 50% of the largest businesses in our sample actually saw revenues grow during the pandemic.

Bar chart showing what share of each SMB segment closed operations

Which businesses survived and which businesses thrived?

Only about 30% of the smallest businesses in our sample were able to grow card revenues during the pandemic. We anticipated that the smallest businesses would be hit hardest, but were still surprised by the extent of the damage.

More than 17% of the smallest businesses in our segment ceased operations entirely during the pandemic. Conversely, less than 1% of larger small businesses (those with more than $300,000 annual card revenue before the pandemic) ceased operations entirely during the pandemic. Smaller businesses that stayed open still saw a much steeper decline in revenue, on average, than their larger peers.

Stacked bar chart

We also examined how many businesses saw their card revenues grow during the pandemic. The larger a business was, the more likely it was to see revenues grow. Only 37% of the largest businesses saw revenue drop during the pandemic.

Looking ahead

Even among micro businesses, a substantial portion of businesses were able to increase revenues in 2020. Identifying businesses that have weathered the last twelve months and are now poised to grow will be a top priority for lenders in 2021.

Our methodology

We looked at a sample of 2.7 million private businesses across the United States in our Merchant Transaction Signals dataset. For each of these businesses, we analyzed monthly revenues based on aggregated, anonymized credit and debit card transactions.

We segmented businesses into six groups based on their average annual card revenue from March 2019 - February 2020, the twelve months before the Covid-19 pandemic took root in the United States. More than half of our sample businesses had less than $300,000 in annual card revenues in this 12-month period.

We then compared the monthly growth or decline of card revenue at each business over the 24 months from March 2019 to March 2021. If transactions disappeared entirely for more than 3 months, we assumed the business had ceased operations.