Kabbage co-founder and COO Kathryn Petralia, joined Yahoo Finance Live to break down how small businesses are measuring their recovery from the COVID-19 pandemic.
SEANA SMITH: A new study out by Kabbage is following small businesses reopening trends. And one of those trends, 57% of small businesses now say that they are fully reopened. So let's talk a little bit more about this with Kathryn Petralia. She is Kabbage's co-founder and COO. And Kabbage is now an American Express company. Kathryn, it's great to have you on the show. So more than half of small businesses are fully reopened. Yes, that is an encouraging headline. But we have to remember, what, more than 40% still aren't fully reopened. How are small businesses faring at this point in the recovery?
KATHRYN PETRALIA: Hi, I feel like one of the things we're seeing is that W-shaped recovery-- sorry, the K-shaped recovery that we've talked about, where a bunch of small businesses are doing really well, especially those who are focused on things around folks' homes because that's where they're spending so much time right now, and other businesses aren't doing so well. I think another thing we're seeing is that larger business, they have more access to tools and services they need to recover, whereas the smallest businesses don't. 90% of all small businesses have fewer than 20 employees. 80% have fewer than 10. So it's important to remember the composition of small businesses.
ADAM SHAPIRO: When we talk about small businesses, that 20 employees or fewer, they were the largest number of respondents to your survey. My question for them is on May 1, in places like New York and I suspect in other parts of the country, the moratoriums on evictions by landlords will expire. Is that reflected, in any way, the concerns of the ability to survive that expiration been reflected in the survey results?
KATHRYN PETRALIA: I think that probably represents-- and I'm no expert on landlords. I don't think that represents a huge percentage of those business owners. Most of these business owners are more traditional, things like, you know, nail salons and dry cleaners and yard service companies and all the things that you might expect to see, all the places you might expect to see small businesses.
SEANA SMITH: Kathryn, small businesses that are reopening, have they had to reset their revenue expectations, just with the shift of online spending? How is that going to affect their business here going forward?
KATHRYN PETRALIA: Well, again, it depends on the type of business. A lot of retail businesses have had tremendous luck moving to an e-commerce environment. They had not previously had an online presence. And they realized that not only through a combination of e-commerce platforms, but also through social media, they could not only reach their existing customers, but they could find new ones as well. So I think we're seeing a lot of that shift happening.
And even restaurants have had done a great job of allowing every single possible food delivery service to allow them to get food into the hands of the customers who were eating there previously. I think, you know, people, these small businesses have been remarkably resilient and thoughtful and careful. And I think we're seeing that play out.
ADAM SHAPIRO: What surprised you about the survey results?
KATHRYN PETRALIA: I think what surprised me was how many small businesses still aren't feeling like they're fully reopened or have an opportunity to generate real revenue. 43% is a big number. And so, trying to understand who those companies are and what puts them in that position, I think is a really important thing to do. Did they have access to some of the financial tools that were provided to them through the CARES Act, like PPP? Those are all questions that we need to answer to understand what it is that's holding these businesses back versus others.
SEANA SMITH: Kathryn, what's a milestone or the data point that these small businesses are looking at, just to determine if they've fully recovered from the pandemic?
KATHRYN PETRALIA: Most small businesses have said they feel like they will be recovered and comfortable if they can re-employ all of the employees they had previously. And that, to them, is the measure of success.
SEANA SMITH: Kathryn Petralia, great to have you on the show, Kabbage co-founder and COO.