An analysis from Invoice2go that compiles invoicing data from nearly 50,000 U.S. microbusinesses (generally five or fewer employees) provides the first glimpse into the impact of COVID-19 on this segment of the economy. While these microbusinesses contribute $2 trillion to the U.S. GDP, they saw a 27% decrease in total invoiced dollar amounts when comparing April 2020 to April 2019. The revenue for those in the Home Maintenance & Outdoor Services industry specifically, however, only fell by 17%.
The data was compiled and analyzed by Invoice2go — an invoicing app used by 230,000 microbusinesses globally. The company analyzed invoices sent by 47,650 U.S. microbusinesses in April across a range of industries, including Marketing & Creative, Health & Wellness, Construction, and Home Maintenance & Outdoor Services. The year-over-year changes were calculated from a constant sample set of users who subscribed prior to Jan. 1, 2018, and remained subscribed through April 30, 2020.
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The research reveals:
- Essential microbusinesses are faring better. Considered essential businesses even in most states with stay-at-home orders, Home Maintenance & Outdoor Services’ revenue only fell by 17% YOY for April.
- Creative services and event businesses plunged. Entertainment, Arts & Food Services were the hardest hit, with a 50% decline YOY in April invoiced dollar amounts, followed by Marketing & Creative services with a 49% YOY decrease in April invoiced dollars.
- Regional differences mirror COVID-19 hotspots. Microbusinesses in the U.S. Northeast appear to be hit hardest, showing a 42% contraction in April YOY invoiced dollar amounts. Businesses based in the Western U.S. experienced a 27% contraction, followed by the Midwest (-23%) and the South (-21%). (Regional groupings of states are those defined by the U.S. Census Bureau.)
Invoice2go, an invoicing app that primarily serves sole proprietors and microbusinesses, is used to send over $25 billion in invoices every year.
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“The ground-level business activity data that Invoice2go is getting from its customers when aggregated across economic regions and the entire country echos very closely the anecdotal picture that we’ve all gathered from the news and from personal experiences within our own networks,” said Noah Hall, Analytics Manager of Invoice2go. “Everyone from painters and plumbers to DJs and graphic designers are feeling the pinch. While there are certain sectors that are faring better than others, this data highlights the need to do more to support microbusinesses.”
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