SMALL BUSINESS AND ITS IMPACT ON GEORGIA
SMALL BUSINESS AND ITS IMPACT ON GEORGIA | 1
TABLE OF CONTENTS
FIGURES
Why Small is Great . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1. Small Firm Employment By Industry . . . . . . . . . . 9
Georgia by the Numbers . . . . . . . . . . . . . . . . . . . . . . 5
2. Georgia Self-Employment Rates by Demographic . . 11
Georgia Business Rankings . . . . . . . . . . . . . . . . . . . . 6
3. Georgia Self-Employment Percentage by County. . 11
Georgia Small Business Employment . . . . . . . . . . . . . 8
4. Georgia Baseline Forecast . . . . . . . . . . . . . . . . . . 15
Georgia Demographic Profile . . . . . . . . . . . . . . . 10
5. United States Baseline Forecast . . . . . . . . . . . . . . 15
Georgia and U.S. Economic Outlook . . . . . . . . . . . . . . 12
6. Lodging Industry Stats . . . . . . . . . . . . . . . . . 17
Industry Outlook: Lodging . . . . . . . . . . . . . . . . . . . 16
7. Healthcare Industry Stats . . . . . . . . . . . . . . . 19
Industry Outlook: Healthcare . . . . . . . . . . . . . . . . . . 18
8. Restaurant Industry Stats . . . . . . . . . . . . . . . . 21
Industry Outlook: Restaurants . . . . . . . . . . . . . . . . . 20 About the UGA SBDC . . . . . . . . . . . . . . . . . . . . . . . . . 22 UGA SBDC Locations . . . . . . . . . . . . . . . . . . . . . . 23
SMALL BUSINESS AND ITS IMPACT ON GEORGIA | 3
Why Small is GREAT Entrepreneurial ventures provide hundreds of thousands of jobs in Georgia for both business owners and employees. Small businesses not only supply principal incomes for families, but also meet unique needs for part-time employment, temporary employment, supplementary income or that first job opportunity. The innovation and creativity that entrepreneurs deliver to the marketplace appear in all types of businesses, and whether high tech or personal services, these engines of economic growth are found in every big city and small town across our state. The University of Georgia Small Business Development Center (UGA SBDC) assists thousands of entrepreneurs every year across our state. The UGA SBDC is a Public Service and Outreach unit of the University of Georgia and is funded through a cooperative agreement with the U.S. Small Business Administration and partnering institutions (Georgia State University, Kennesaw State University, Clayton State University, Valdosta State University, Georgia Southern University, University of West Georgia and Morehouse College). The UGA SBDC provides management training and one-onone assistance to small business owners and prospective entrepreneurs. Over the past five years, individuals who have sought assistance from the UGA SBDC have created more than 1,800 new businesses, added more than 13,000
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jobs, raised more than $1.029 billion in loan and equity financing, and generated over $8.8 billion in sales. According to the latest impact study, firms that have sought UGA SBDC assistance experienced job growth of 2.5 percent versus the typical Georgia firm which decreased employment by 4.6 percent.
Small firms and their distinctive offerings provide custom products and services that are otherwise unavailable, are a convenience for residents and visitors to our state, and help create the community character and local charm that defines our hometowns. We believe in the strength of small business and have produced this report to describe some of the impacts small businesses have in Georgia. This publication provides an overall perspective of Georgia’s small business environment and shines the spotlight on several noteworthy industries. Most importantly, this publication helps illuminate the contributions made by Georgia’s entrepreneurs on the economic well-being of all Georgia citizens.
GEORGIA BY THE NUMBERS 1.1 M
39.6%
Small Businesses in Georgia
99.6% of Georgia Businesses are Small
of Georgia Businesses are Minority-Owned
1.7 M
42.8%
87.6%
Small Business Employees in Georgia
of all Private-Sector Employees
of all Georgia Exporters are Small Businesses
Source: “Small Business Profile – Georgia.” U.S. Small Business Administration, Office of Advocacy, 2021.
SMALL BUSINESS AND ITS IMPACT ON GEORGIA | 5
GEORGIA RANKINGS
#1
Top State for Doing Business1
#1
Best Business Climate2
#1
Best State for Black Entrepreneurs3
#3
Best Metro Area for Women Entrepreneurs4
Area Development
Site Selection
Sources: 1 “Top States for Doing Business 2021,” Area Development, 2021. “2020 Business Climate Rankings,” Site Selection, Nov. 2020. 2
“The Best States for Black Entrepreneurs,” Fit Small Business, Feb. 2020. 3
“10 Best Metro Areas for Women Entrepreneurs,” US News, Dec. 2020. 4
Fit Small Business
“America’s Top States for Business,” CNBC, July 2021. 5
“Best States for Business,” US News, March 2021. 6
“State Economy Rankings,” WalletHub, June 2021. 7
“America’s Top Export States,” World’s Top Exports, 2021. 8
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US News
#6
Top State to Start a Business5
#9
Best State for Business6
CNBC
US News
#10
Best State Economy7
#10
Top Export State8
WalletHub
World’s Top Exports
DALLAS, GA SMALL BUSINESS AND ITS IMPACT ON GEORGIA | 7
GEORGIA SMALL BUSINESS EMPLOYMENT While COVID-19 was a major factor in employment throughout 2020, Georgia has made great strides in increasing employment through late 2021. Unemployment numbers have dropped from 5.4 percent in January 2021 to 3.2 percent in September 2021.1
The Georgia Department of Labor released that the state’s September unemployment rate is at an all-time low, dropping below the 3.3 percent unemployment rate seen in January 2020. Georgia’s unemployment rate in late 2021 shows that the state is making excellent progress in recovering from the 2020 shutdowns, and we can expect to see it continue to rapidly recover throughout 2021 and into 2022.1
1.7 MILLION
1.1 MILLION
Small Business Employees2
Small Businesses in Georgia2
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SMALL FIRM EMPLOYMENT BY INDUSTRY2 EMPLOYERS
EMPLOYMENT
PAYROLL ($1,000s)
INDUSTRY
SMALL
%
SMALL
%
SMALL
%
Professional, Scientific and Technical Services
27,367
98.0
153,558
54.6
10,738,619
47.2
Retail Trade
20,853
97.6
145,496
30.4
4,886,189
37.6
Other Services (except Public Administration)
20,282
99.1
137,501
84.3
4,051,704
79.7
Health Care and Social Assistance
18,840
98.4
227,763
44.2
9,699,322
36.9
Construction
18,421
99.1
227,763
44.2
8,116,622
71.5
Accommodation and Food Services
15,320
98.0
267,872
59.3
4,437,695
57.4
Administrative, Support and Waste Management
10,280
95.4
117,630
30.2
4,476,804
32.4
Wholesale Trade
9,795
92.6
102,633
47.6
6,278,003
43.1
Real Estate and Rental and Leasing
9,716
97.9
39,970
56.9
2,079,767
44.7
Finance and Insurance
7,579
94.8
52,663
30.0
3,669,203
22.7
Manufacturing
6,032
90.9
129,749
33.4
6,224,539
30.4
Transportation and Warehousing
5,378
92.3
44,060
22.3
1,919,008
17.4
Arts, Entertainment and Recreation
3,226
98.2
32,252
59.4
816,270
44.5
Educational Services
2,839
97.5
47,417
51.9
1,491,325
39.3
Information
2,443
90.1
28,410
21.1
2,107,000
16.7
Agriculture, Forestry, Fishing and Hunting
912
98.7
6,859
93.2
295,712
91.3
Management of Companies and Enterprises
502
49.5
9,825
7.0
913,548
5.7
Industries Not Classified
446
100.0
339
100.0
12,833
100.0
Utilities
125
85.6
6,753
27.4
557,274
23.7
86
82.7
1,972
37.8
122,673
34.8
179,568
97.6
1,700,148
42.8
72,894,110
35.7
Mining, Quarrying, and Oil and Gas Extraction TOTAL Sources: 1. “Economy at a Glance – Georgia.” U.S. Bureau of Labor Statistics. 2021
2. “Small Business Profile – Georgia.” U.S. Small Business Administration, Office of Advocacy, 2021.
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DEMOGRAPHIC PROFILE OF GEORGIA SMALL BUSINESS OWNERS Georgia continues to exhibit a wide spectrum of diversity among the state’s entrepreneurs. The U.S. Small Business Administration Office of Advocacy found that women own 45.8 percent of Georgia businesses, with there being 36,913 female-owned businesses with employees across the state.1 In the 2019 State of Women-Owned Business Report by American Express, Georgia ranking #1 in economic clout, which is defined as the growth in the number of firms and growth in employment and revenues.2 Georgia is also home to 443,976 minority owned businesses which accounts for 39.6% of the state’s businesses.1 Georgia ranks fifth in the nation for states with the most minority-owned businesses.3 With Georgia’s business friendly environment and historical results, we can expect to see women-owned and minority-owned businesses continue to grow in both numbers and influence. Sources: 1. “Small Business Profile – Georgia.” U.S. Small Business Administration, Office of Advocacy, 2021. 2. “The 2019 State of Women-Owned Businesses Report.” American Express, 2019. 3. “Minority Businesses by State,” Maxfilings, 2021.
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FIGURE 1 GEORGIA SELF-EMPLOYMENT RATES BY GENDER AND DEMOGRAPHIC1 AFRICAN AMERICAN ASIAN HISPANIC OTHER RACE TWO OR MORE RACES VETERAN NONVETERAN
MINORITY NONMINORITY
ALL WORKERS
FEMALE (%) MALE (%)
FIGURE 2 GEORGIA SELF-EMPLOYMENT PERCENTAGE BY COUNTY1
3.5 to 7.6 7.6 to 9.4 9.4 to 11.1 11.1 to 19.8
SKIDAWAY ISLAND, GA Source: “Small Business Profile - Georgia.” U.S. Small Business Administration, Office of Advocacy, 2018. Web.
SMALL BUSINESS AND ITS IMPACT ON GEORGIA | 11
Economic
OUTLOOK DR. JEFFREY M. HUMPHREYS
“The 2022 economic forecast for Georgia is positive - the pattern of slightly faster economic recovery for Georgia than for the U.S. will continue.”
DIRECTOR, SELIG CENTER FOR ECONOMIC GROWTH, TERRY COLLEGE OF BUSINESS, UNIVERSITY OF GEORGIA
“The 2022 economic forecast for Georgia is positive - the pattern of slightly faster economic recovery for Georgia than for the U.S. will continue. Last year, I predicted that Georgia’s economic recovery would occur in three distinct phases: an initial “bounce” in economic activity due to the lifting of “stay-at-home” restrictions and business re-openings; followed by a period of “choppy” economic growth that would persist until contagion fears abated due to widespread vaccination and the development of natural immunity; followed by a period of steadier aboveaverage economic growth. The “bounce” and “choppy” phases of the economic recovery are over. In 2022, I predict above-average economic growth. Georgia’s GDP will grow by 4.3 percent, exceeding the state’s long-term average rate of GDP growth of 2.3 percent. The pace of Georgia’s GDP growth will be slower than in 2021, but it will be much less erratic – steadier – than we’ve seen since the recovery began. In 2021, the GDP fully recovered in both Georgia and U.S. Before the end of 2022, Georgia’s
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job count will surpass its pre-pandemic peak. At that time, Georgia’s economy can be considered fully healed in terms of jobs. In contrast, the U.S. job count is unlikely to surpass it pre-pandemic peak until the second quarter of 2023. One big difference between the forecast for 2022 and what transpired over the last couple years is that the private sector will be the main strength of the economy. Spending by consumers, investment spending by businesses and the housing market will be the main economic drivers. In addition, we will enter 2022 with an abundance of unfilled jobs. That’s quite a change from 2020 and 2021, when the Federal government was the main, and at times only, economic driver. In 2022, federal fiscal stimulus will wind down rapidly. The Federal Reserve’s monetary policy stance will shift from providing stimulus in 2021, to neutral in 2022, to restrictive late in 2022. Although the economic forecast for Georgia is positive, there are several headwinds and downside risks.
I am mostly concerned about supply-side problems ranging from shortages of raw materials, to shortages of intermediate goods, to shortages of finished goods, to shortages of workers. Supply constraints and transportation bottlenecks slowed economic growth in 2021 and will do so again 2022. Most of the demand for goods and workers that goes unmet is simply delayed, which raises the prospects for growth once supply chain problems are resolved. The main risk to the economy from supply constraints is that inflation will run hotter for longer than expected. We’ve already see some of that. The Federal Reserve’s likely response to higher than expected inflation would be to increase interest rates, potentially much faster than market participants currently expect. A quick, aggressive pivot from easy money to tight money could trigger a recession because the economy is not well positioned to absorb substantially higher interest rates. Stock prices are inflated and corporate leverage is at historic highs. A large increase in interest rates could trigger a recession through either a stock market correction or a corporate debt crisis. Another risk to the economy is that the pandemic is not over. The expectation is that each succeeding wave of cases will do less damage to the economy, but mutations of the virus that are more deadly could develop. Nonetheless, I believe the risk that COVID-19 will trigger another recession is very low. Although downside risks dominate the headlines, there are many upside possibilities that could cause Georgia’s economy to grow significantly faster than I predict.
For example, consumers may spend more of their massive accumulation of savings than expected. If contagion concerns dissipate rapidly, spending for highcontact services such as travel and dining out may increase considerably. In addition, households will spend more if products become more readily available. Another upside possibility is that the labor force could grow much faster than expected, especially if recent retirees and people who stopped working during the pandemic to care for family members re-enter the labor force in larger numbers. Another upside possibility is that our forecast for Georgia assumes that foreign immigration will remain at very low levels, but that could change. For example, perhaps entry will be eased across the board or eased for specific groups, such as refugees from Afghanistan. Another upside possibility is that Georgia’s economic development project announcements could be even stronger than expected. Overall, the upside and downside risks to our 2022 forecast for Georgia are evenly balanced. Since the main headwinds are more likely to slow growth rather than trigger a recession, we judge the risk of a recession beginning in 2022 to be low – about 20 percent. Let’s look at the forecast in detail. Georgia’s GDP will increase by 4.3 percent in 2022 – that’s below the 5.8 percent gain estimated for 2021, but it compares very well to the 2.5 percent decline reported for 2020. It’s also well above the long-term rate of Georgia’s GDP growth of 2.3 percent. Georgia’s 2022 GDP growth of 4.3 percent will be 0.3 percentage points higher than the 4.0 percent rate estimated for U.S. GDP.
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CONTINUED FROM PREVIOUS PAGE Georgia’s labor market will improve too. The number of jobs will rise by 3.2 percent in 2021, which exceeds the 2.7 percent gain estimated for the U.S. Georgia’s unemployment rate for 2022 will be below pre-pandemic levels. It will average 3.2 percent, or about 0.9 percentage points lower than the 4.1 percent rate estimated for the nation in 2022. Georgia’s low unemployment rate implies fast growth in workers’ salaries.
Georgia’s
The prospects for personal income growth are good, but growth will slow sharply. In 2022, Georgia’s nominal (not adjusted for inflation) personal income will grow by 1.9 percent and US personal income will grow by 0.6 percent. Our modest expectations for personal income growth reflect the wind down of the massive federal stimulus programs that provided large transfer payments to individuals in 2020-21. The combination of rapid job growth and the state’s very low unemployment rate will cause compensation to grow strongly in 2022, which will help to offset the drop in stimulus funds going to households.
Georgia’s economic recovery will outpace the general U.S., due to the following factors:
In 2022, the main drivers of the nation’s and Georgia’s economic recovery will be consumer spending, the housing market and businesses’ spending for equipment and software. There’s also a lot of unmet demand for workers that bodes well for job growth. Full recovery of the economy will arrive sooner in Georgia than in the U.S. In Georgia, there’s relatively less economic debris to clean up. In addition, many of the factors that caused Georgia to outperform the U.S. economy prior to the pandemic are reasserting themselves. Consumers will be the main strength of the 2022 economy. Consumers’ inflation-adjusted spending will increase at an above trend rate of 4.5 percent - quite an accomplishment given the large drop in federal stimulus and assistance transfers to households. Job growth and increases in compensation will power consumer spending, but the 4.5 percent increase in spending will be possible only because I expect a large drop in the personal savings rate as well as spending excess savings that accumulated during the pandemic.”
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OUTLOOK 1.
Build out of projects in Georgia’s economic development pipeline
2.
Georgia’s competitive state-level economic development incentives
3.
More leverage than most states from the housing boom
4.
More leverage than most states from higher vehicle sales
5.
Georgia’s population will grow faster than the nation’s due to in-migration from other states
GEORGIA BASELINE FORECAST 2021-20221 UNITED STATES
2017
2018
2019
2020
2021
2022
Gross Domestic Product Bil. of 2012$
519.5
538.7
547.2
533.6
564.5
588.8
Percent Change
3.7
3.7
1.6
-2.5
5.8
4.3
Nonfarm Employment (Thousands)
4,452.6
4,535.7
4,619.9
4,406.5
4,529.2
4,673.1
Percent Change
1.9
1.9
1.9
-4.6
2.8
3.2
Personal Income, Bil. of $
467.4
493.6
512.1
548.0
586.3
597.5
Percent Change
5.8
5.6
3.8
7.0
7.0
1.9
Housing Permits, Total
51,240
59,315
53,823
53,131
73,000
80,000
Unemployment Rate (Percent)
4.8
4.0
3.5
6.5
3.9
3.2
UNITED STATES BASELINE FORECAST 2021-20221 UNITED STATES
2017
2018
2019
2020
2021
2022
Gross Domestic Product Bil. of 2012$
18,079.1
18,606.8
19,032.7
18,384.7
19,395.9
10,171.7
Percent Change
2.3
2.9
2.3
-3.4
5.5
4.0
Nonfarm Employment (Mil.)
146.6
148.9
150.9
142.2
145.6
149.4
Percent Change
1.6
1.6
1.3
-5.8
2.3
2.7
Personal Income, Bil. of 2012$
15,888.8
16,346.3
16,761.3
17,646.8
18,036.3
17,547.9
Percent Change
2.8
2.9
2.5
5.3
2.2
-2.7
Personal Income, Bil. of $
16,805.2
17,706.0
18,424.4
19,627.6
20,903.4
21,028.8
Percent Change
4.7
5.1
4.1
6.5
6.5
0.6
Civilian Unemployment Rate (%)
4.4
3.9
3.7
8.1
5.5
4.1
CPI-U, Ann. % Chg.
2.1
2.4
1.8
1.2
4.6
4.2
Source: 1. The Selig Center for Economic Growth, Terry College of Business, University of Georgia, 11/08/2021
SMALL BUSINESS AND ITS IMPACT ON GEORGIA | 15
INDUSTRY SPOTLIGHT: LODGING Hosting 150 million domestic and 1.5 million international visitors a year, the lodging industry is an integral part of Georgia’s economy.1 Almost ten percent of all jobs in Georgia are related to the lodging industry, and these 57,000 employees earn $2.5 billion in total employee wages. Hotels, motels and resorts generate nearly $4 billion in direct sales a year and contribute to the nearly $69 billion tourism industry.2
High-profile events like Super Bowl LIII bring in hundreds of thousands of out-of-state visitors and contribute millions to the state’s economy. Smaller events such as family reunions, conventions and concerts also have an impact on the lodging industry. Last year, the Savannah Music Festival and Shaky Knees Festivals saw 40 percent of attendees come from out of state.5
The lodging industry was the hardest hit in the early months of the pandemic. A popular city for conferences and conventions, Atlanta saw its hotel occupancy plunge from 74 percent in February 2020 to a mere 9 percent in April. Nevertheless, tourism in Georgia remained slightly more active compared with other states. In 2020, 31 percent of travel in Georgia was for holiday, leisure, or recreational purposes, and 24 percent was for visiting family and friends.2
As vaccines become more widely available, leisure travel is expected to bounce back much quicker than business travel. Businesses have well adapted to new online modalities in the past two years and will likely continue holding meetings and conferences online to accommodate all participants. Short car trips to visit family and friends will take precedence over air travel, and domestic travel will increase much quicker than international.
Over the past two years Georgia’s lodging industry has focused almost exclusively on in-state travelers. As the economy continues to stabilize, Georgia is seeing an upward trend in nationwide travel.3 Hotel occupancy reached a 12-month high in the first quarter of 2021 and continued to show an upward climb throughout the summer. As of the first quarter of 2021, statewide occupancy levels reached 61 percent.4
Recovery will also vary by property type. Economy and midscale properties that host essential workers, extended-stay guests and leisure travelers will likely recover once consumer confidence and a willingness to travel has returned. Upscale and luxury properties directed towards international business and tourism will likely require more time to recuperate.6
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ATLANTA, GA
Governor Kemp and the Georgia General Assembly originally amended the FY21 state budget and approved $1 million for tourism recovery. However, because of the significant number of grant applications totaling nearly $2.5 million in requested funds, Explore Georgia contributed an additional $1 million to increase available funds for grants. The Explore Georgia Tourism Recovery Marketing program also contributed $500,000 in coop matching funds, bringing the total recovery support to $2 million. Recent research shows that 90 percent of Americans have travel plans within the next six months, the highest in well over a year. These numbers show promising growth for Georgia’s lodging industry.7
Lodging
10% $2.5B 90%
STATS
of all jobs in Georgia are related to the lodging industry2
generated annually in Georgia employee wages in the industry2
of Americans have travel plans within the next six months7
Sources: 1. “Georgia Tourism by the Numbers.” Explore Georgia, 2019. 2. “Gov. Kemp: Explore Georgia Supports Tourism Industry Recovery.” Georgia.org, 2021. 3. “Georgia Tourism Industry Bouncing Back From Pandemic Heading Into Summer.” GPB, 2021. 4. “Georgia Hotel Industry Report | 2021 Q1.” Colliers, 2021. 5. “The $64-billion Connection.” Georgia Trend, 2019. 6. “2021 Industry Outlook.” Georgia Trend, 2021. 7. “Atlanta Lodging and Hotel News.” Atlanta Business Chronicle, 2021.
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INDUSTRY SPOTLIGHT: HEALTHCARE The healthcare industry is a fundamental building block of Georgia’s economy. Hospitals are one of the largest employers in many communities throughout the state. Georgia’s healthcare industry provides over 162,000 full-time jobs and spends over $28 billion a year, including over $11 billion in payroll wages and benefits. The healthcare industry has an economic impact of over $65 billion throughout the state, in addition to nearly $3 billion in uncompensated actual cost in the form of charity.1
fostered by Georgia’s academic institutions and healthcare providers that supply the state with a highly-trained healthcare IT workforce.6
In Georgia, healthcare practitioners and technical occupations account for 4 to 6 percent of the state’s total employment, while healthcare support occupations account for 1 to 3 percent of total state employment.2 Georgia is home to nearly 25,000 practicing physicians, 4,000 physician assistants and 141,000 nurses.3 By 2028, healthcare practitioners, technical occupations and health care support are predicted to grow by 2 percent per year.4
The pandemic naturally accelerated the rise of telemedicine and a growing portion of the population has become accustomed to online healthcare. Even as in-person visits reemerge, it is likely that many patients will continue using telemedicine out of convenience.7 Overall, the healthcare industry has a tremendous impact on the state and local economies, and certainly plays a key role in the wellbeing of Georgia’s citizens.
Georgia has emerged as a leader in healthcare IT. Housing more than 225 high-tech health companies, this sector currently employs about 30,000 Georgians. These companies saw tremendous growth throughout the pandemic thanks to the innovative solutions they developed.5 This growth is also
Sources: 1. “Annual Economic Impact.” Georgia Hospital Association, 2020. 2. “22 Million Employed in Health Care Fight Against COVID-19.” U.S. Census Bureau, 2021. 3. “Physician Renewal Survey.” Georgia Board of Health Care Workforce, 2020. 4. “Georgia Workforce Trends.” Georgia Department of Labor, 2018. 5. “Georgia Leaders in Healthcare IT.” Georgia Trend, 2021. 6. “Health IT Industry Map.” Where Georgia Leads, 2020. 7. “How Health Care in the U.S. May Change After COVID: An Optimist’s Outlook.” GPB News, 2021.
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Healthcare will continue to be one of the leading industries with a predicted growth rate of 24 percent by 2028 and will account for over one-fifth of new jobs created in Georgia. With Georgia’s growing and aging population, there will be a rise in demand for a variety of specialized services.7
Healthcare
$11B
STATS
generated annually in payroll and benefits in the Georgia’s healthcare industry1
24%
predicted growth rate for Georgia’s healthcare industry through 20287
20%
of new jobs created in Georgia are predicted to be in the healthcare industry7
$65B
annual economic impact of healthcare in Georgia1
MOBILE FLU SHOT CLINIC ATHENS, GA
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INDUSTRY SPOTLIGHT: RESTAURANTS In the 1950s, the average family spent only a quarter of their food money at restaurants. Today, half of the money we spend on food takes place outside the home.1 Georgia’s iconic and innovative restaurant industry is home to nearly 19,000 eating and drinking locations, bringing in $25 billion a year.2 With every dollar spent on table service, nearly $2 goes back into the local economy.3 This industry provides communities with half a million jobs across the state, accounting for 11 percent of all employment.4 Initial projections put more than 25 thousand new jobs in the restaurant industry between 2016 and 2026, making it one of the fastest growing and diverse in the state.4 Restaurants tend to be hubs for minority employment— nationwide, over half of all chefs, prep-cooks, bussers, baristas and dishwashers come from minority backgrounds. Over half of all restaurant employees are women and restaurants employ over one million single mothers nationwide.5 Over the past two years, the food service industry has encountered many unprecedented challenges. Restaurant owners and employees have risen to the occasion and developed creative
20 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
ways to keep their businesses afloat. From outdoor dining and curbside pickup to touchless menus and food delivery apps, the pandemic has fundamentally changed the way most restaurants operate.4 After the initial shutdown, many restaurants began to reopen with carryout and curbside before safely opening their doors to the public. Governor Kemp lifted spacing restrictions in early April 2020, allowing restaurants to return to full capacity if choosing to do so. However, many Georgia restaurants reopened at a gradual pace, taking care to protect their employees and customers.6 Atlanta has experienced a meteoric rise in the national restaurant scene, currently ranking fifth in best places for dining out. Restaurants in Atlanta are bouncing back, seeing $3,745 in sales per capita.3 Current challenges are largely related to filling the employment gaps brought on by the pandemic.7 Nevertheless, The National Restaurant Association (NRA) has positive projections for Georgia in 2022: we are expecting to see restaurant industry employment growth of eight to 11 percent.6
Restaurant
COOL WORLD ICE CREAM SHOP ATHENS, GA Overall, the restaurant industry is expected to make a full recovery in 2022.7 The NRA predicts an accelerated speed of change with the emergence of new business models, such as offpremise businesses. Indeed, 60 percent of restaurant-bought food is consumed off-premises, a number that is expected to grow to 80 percent by 2025.7 Consumers’ desire for convenience, socialization and quality service will continue to drive restaurant industry growth in the future. Other projected trends include mobile and handheld payments, digital takeout and delivery. In addition, the industry will continue to diversify, with women and minorities holding a larger proportion of upper management roles.8
$25B 11%
STATS
brought in annual in sales through Georgia’s restaurant industry2
anticipated growth in Georgia’s restaurant industry employment in 20226
With the growth of these new trends, there are plenty of opportunities for restaurant businesses to recover, prosper and continue providing delicious comfort to the Georgia community.
Sources: 1. “Atlanta Ranked Among Best To Start A Restaurant.” Patch, 2019. 2. “About the GRA.” Georgia Restaurant Association, 2021. 3. “Georgia Restaurant Statistics.” National Restaurant Association, 2021. 4. “4 In 10 GA Restaurants Will Close In The Next 6 Months If They Don’t Get Help, New Study Shows.” Georgia Restaurant Association, 2020. 5. “Industry Outlook.” National Restaurant Association, 2021. 6. “Some Restaurants Play it Slow Despite No Restrictions on Thursday.” Fox5 Atlanta, 2021. 7. “2021 Economic Outlook: The Long Road to Recovery Continues.” Georgia Restaurant Association, 2021. 8. “Restaurant Industry 2030.” National Restaurant Association , 2021.
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ABOUT THE UGA SBDC The University of Georgia Small Business Development Center (UGA SBDC) provides business training and consulting services to help small businesses grow and succeed. Working with chambers of commerce, lending institutions and other business development organizations, the UGA SBDC educates business owners on how they can grow their businesses, as well as helps aspiring entrepreneurs improve their chances for success. Considered to be one of the state’s top providers of small business assistance, the UGA SBDC can help in the areas of business planning, market development, access to capital, record keeping and a myriad of other topics through various educational and technical assistance activities. The UGA SBDC is a Public Service and Outreach unit of the University of Georgia and is funded in part by the U.S. Small Business Administration (SBA). The University of Georgia Small Business Development Center is nationally accredited by the Association of SBDCs and SBA.
EDITORIAL CONTRIBUTORS: Breeanna McBee Macy Thomas Berea Antaki Beth Melnik Dr. Jeffrey Humphreys
PHOTO CONTRIBUTORS: University of Georgia Marketing and Communication Shannah Montgomery
For more information about our organization, visit:
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22 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
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