Financial impact of COVID-19 revealed in QuickBooks analysis of 1 million small businesses

Intuit QuickBooks commissioned economist Susan Woodward to uncover how COVID-19 has affected the finances of small businesses throughout the U.S.1

Woodward’s analysis uses net bank deposits — in other words, how much money is going into business bank accounts (excluding loans and government support) — to create the most complete estimate available of the pandemic’s impact on small business revenue.2 The businesses represented in this report are from every major sector and industry.3 Typically they have 10 employees or fewer.

Key findings

  • COVID-19’s impact on small business revenue was most severe in April 2020 when it dropped by 22% nationwide compared to before the pandemic — equivalent to $4.6 billion during that month alone for the businesses in the sample.4
  • Overall, 61% of industries saw annual revenues increase during the pandemic, following a largely sustained recovery since April 2020.
  • Home improvement and real estate businesses have been among the top performers over the past 12 months. At the end of March 2021, mortgage bankers’ annual revenues were up by 30% compared to their pre-pandemic level — an increase of $147,000 per business.
  • Some of the worst-hit small businesses are in the recreation industry. At the end of March 2021, bowling alleys’ annual revenues are down by 33% — a drop of more than $250,000 per business — compared to before the pandemic.5
  • In general, small businesses in high-density, urban areas — especially in states located on the east and west coasts — experienced a greater financial impact.6 Some of the worst-hit cities include Brooklyn, New York and San Francisco, California.

One year on, it’s a mixed picture for small businesses

Much has been said about how COVID-19 has been devastating for the small business economy. Stories like that of Idaho caterer Gretchen Talbert can be found up and down the country.

“We were having our best business year ever,” Gretchen says. “And then COVID hit and every single event canceled. We were in a panic — we didn’t know what to do.”

But this new QuickBooks analysis reveals a mixed picture. Yes, the financial impact has been significant, but it hasn’t always been for the worse.

Surviving businesses are recovering fast

The most encouraging finding is that even some of the worst-hit businesses are back to their pre-pandemic levels.

For example, by the end of March 2021, the monthly revenues of hair studios were 13% above their pre-pandemic levels. This is a huge turnaround from the low point in April 2020 when their monthly revenues were 78% lower than before the pandemic — equivalent to more than $11,000 per business for that month alone.

As we explore in more detail later in this report, the recovery started long before March 2021.

Up next: Worst-hit businesses

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