The businesses that are recovering from pandemic losses at a quicker rate than others have one thing overwhelmingly in common: they're digital.
Small business funding platform Biz2Credit released its Recovery Ranking for the year on Thursday, naming the industries that are soaring and struggling in their financial positions as they try to bounce back from the effects of the pandemic.
As part of its new study, Biz2Credit examined financials for the more than 200,000 small companies--defined as those with fewer than 250 employees and $10 million or less in annual revenue--that submitted funding requests through the firm's funding platform. The ranking weighed a business' number of loans approved from the Paycheck Protection Program along with demand for growth capital.
The results show that the finance and insurance industries made the strongest recovery, followed by retail trade, real estate and wholesale trade. Meanwhile, sectors such as educational services, arts, information technology, entertainment and recreation lagged behind.
Businesses in the financial services and insurance sectors witnessed high demand for growth capital and did not experience as much distress compared to businesses in the arts and hospitality industries, which completely shut down when the economy came grinding to a halt last year.
Reopenings and pent up demand certainly helped some of these businesses with their recovery, says Biz2Credit's CEO Rohit Arora, while others who lagged behind may just not be as digitally savvy.
Arora adds that the industries that have some catching up to do could try offering more services and products through digital channels or embrace technology more. Of course, this may be more applicable for some sectors, such as construction companies looking to bring in new technology, compared to others, like theater operators focused on live performances.
Indeed, as businesses face new problems like labor shortages, more are turning to other digital technologies--like automation and artificial intelligence--to cope with the gaps they need to fill. Though digital transformation of an industry doesn't happen overnight, incorporating technology solutions into your company and increasing digital offerings can create new business opportunities and help keep the competition at bay.